(10min 21) Which sectors are the best for job security in 2009. Richard Jeremiah, industry analyst at IBISWorld, looks at the best sectors to work into weather the economic storm.
Add your thoughts and experiences in the Talkback section at the end of this post.
View all BTalk Australia podcasts here.
Subscribe to BTalk Australia on iTunes.
- Today’s Transcript
Phil Dobbie: Hello I’m Phil Dobbie and welcome to BTalk Australia. Today, we look at the best jobs to be in, in 2009.
Well yesterday we were joined by Richard Jeremiah from IBISWorld. He’s an industry analyst at IBISWorld. He joins us again today. Yesterday, we were looking at the worst jobs to be in, in 2009. Let’s take a slightly more positive stance today and look at some of the better jobs. In fact, a lot of industries are fairly resilient to economic downturns — some do even better. And we still go for cosmetics and things that are going to make us look good. Maybe we’ll just choose a different brand.
Richard Jeremiah: Well, that’s correct Phil. The cosmetics you use is something that does actually do well in a recession. And this, it’s called the lipstick index. And it’s something that economists follow because once lipstick sales start going up, then things aren’t looking too good. And this is really because history has shown us that women continue to spend during a downturn but what they do, do when they spend is they transfer their spending from more expensive items, fashion items, so you’ve got shoes and handbags and those sort of things, to cheaper alternatives such as cosmetics, particularly lipstick. And this is just because they want to continue to have that purchasing experience and feel good. So they continue this out by transferring their spending and cosmetic and toiletry retails/manufacturers, feel the good effects of this. And we expect this particular industry will increase employment to around an extra 1700 jobs, which for this industry is relatively solid, as it doesn’t employ a huge number of people. And so to these guys, this is a pretty good thing.
Dobbie: Now health is another thing. It’s another have to have of course, isn’t it? So even though the job might be secure, not a good time to be asking for a pay raise, probably.
Jeremiah: No, with health, it’s interesting because we can split health up into two sides. We’ve got essential health services and then also sort of more allied or discretionary health services. And when I say discretionary, we’re looking at things like massage, acupuncture and those sorts of things that people get when they’ve got the time and money to seek out those services. But overall, health does well just because people continue to get sick in a downturn. And also, the other thing we’ve got is a demographic trend of Australia’s aging and longer living population which provides a really good floor to demand here. So basically, for health, they just keep marching on. It’s not necessarily that they like cosmetic and toiletry retails, they do better, they just don’t do badly like a lot of other people are. And so, for health, one of the things that helps with essential health is it’s subsidised by the government, while allied health services get some support, just from the fact that a lot of private health insurance covers that. So there will be jobs growth for this industry. It looks as though across the entire health sector, there will be an extra 17,000 plus jobs over the course of 2009, which sounds really, really big, but health employs hundreds of thousands of people. So, it’s not really, in terms of percentage terms, it’s not that big. But yeah, if you’re looking to change jobs, it’s probably not the time anywhere, in this particular industry. It’s probably best to just look out for the position you’ve got.
Dobbie: Yeah. Gee, I like the idea of the massage though. I’m just thinking, if you’ve lost your job, starting the day off with a massage would be good, but I guess you haven’t got the money if you’ve lost your job. Farming is another good one and you’re saying it’s going to be a good year for farmers, presumably weather permitting.
Jeremiah: Yeah, this is obviously weather permitting. I mean it has been a better start to the year for farmers. I don’t think we necessarily classify it as a great start. But it’s definitely better than it has been. And so there will be employment opportunities within the agricultural sector. And one of the things about the agricultural sector in terms of employment environment is the increased corporatisation of farming. And interestingly enough, corporatisation is a good thing from an employment perspective and the reason this is, is because people don’t actually have to own their own farm to get involved in the industry. They’ve got a big corporate that’s taking care of capital. So what they can do is get a job as a farm manager without actually having to put up the capital. So from an employment perspective, the increase in corporatization is having a good effect. And the other thing with farming is they are facing and continue to face the shortage of labour. And this will be exacerbated by higher production, assuming that the good start to the year continues.
Dobbie: Now, we’ve talked a little bit about construction, we’ve talked about housing. But, which housing and commercial property I guess, and we’ve said that it’s not a good year, but you reckon generally, other elements of the construction industry, it’s not going to be too bad. I guess you’re expecting some more infrastructure investment. Are you?
Jeremiah: Yeah, this is exactly what we expect. Pretty much construction can be divided up into non-building construction and building construction. Building construction is expected to tank. Non-building construction is expected to go well. Another term for this is really just construction of infrastructure. And this will be supported by the government counter-seeking cost spending which is just a fancy term of saying is that all they’re trying to do is hold up the economy by spending money. And so this will be focused on trying to free up those infrastructure bottlenecks which Australia hasn’t been really able to focus on just because we’ve had such strong economic growth and the government trying to pour money into this area, and all it’s done would have increased inflation. So, this is now an opportunity the government has to free up those bottlenecks, invest in things like rail roads, bridges, energy generation plants and those sorts of things. And this is going to provide a significant boost to employment here. And so it’ll be interesting to see whether there is a bit of a flow from the building construction side of things to the non-building side of construction things, in terms of employment, whether we’ll see those people that are made redundant in one side of things are transferred to the other.
Dobbie: There might be a bit of a lag effect, of course, the infrastructure projects take a while to get up and running so that might be a later in the year thing rather than an earlier in the year thing. Public transport, you believe, is going to be a good employer in 2009. Now you’ve got a more positive attitude towards that because you’re in Victoria. Living here in New South Wales, we’ve just about giving up on public transport. Do you think we’re going to see these young finance whizzes who’ve sold their Mazaratis, they’re going to be forced to cram onto rush hour trains, so we’re going to have more people running trains. Is that what you’re reckoning?
Jeremiah: Well, we expect that this is going to be interesting and, the drop in oil prices is, we’re not too sure what the effect of this is going to be. There has been a bit of rail renaissance in the last five years, high oil prices, environmental awareness and also longer commuting times have driven people from their cars to rail. But having said that, services across most of the country aren’t fantastic, which means that there are many communities out there who are getting a little bit frustrated. So, does this mean that the fall in oil prices will drop them back into their cars? We’re not too sure. So this is going to be a little bit interesting to see what happens over the course of the next year. But IBISWorld is expecting that the world oil price will increase. So if there is any reduced patronage, it may be pretty short lived. But overall, governments are investing in this, in public transport, and in particularly rail. And so we do expect that there’ll be an increase in the number of services. And this will provide a boost to employment. What happens with patronage, well, we’ll see what happens over the course of the year, could be an interesting one.
Dobbie: Now, biotechnology is a safer bet of course. In fact, we’ve even seen some people successfully raising capital to fund new projects in this sector. So this really is a boom sector isn’t it?
Jeremiah: Yeah, biotech is actually really starting to hit it just a bit. But as the industry continues to mature, we have more products coming to market. And so, this is fuelling increased private investment in the industry and creating additional jobs. In recent times, Australian biotech companies raise nearly two billion, which is a lot of capital raising for sure. But at the same time, there are going to be start-ups and the smaller companies that’ll suffer just because of the tight lending environment. And the difficulty in attracting capital, particularly when they haven’t got drugs in the pipe line, and other applications in the pipe line. It makes it difficult to attract capital. So this could be a little bit of a tale of two stories here with the bigger companies doing really, really well and surging on and providing good opportunities for employment while some of the smaller companies may find things a little bit difficult.
Dobbie: Online, of course, it’s always been a bit of a boom and bust story with online. But you believe that the future is looking pretty healthy.
Jeremiah: Well when it comes to online shopping, for example, we’re actually expecting that the downturn could be a bit of a catalyst to push people online for their purchasing of goods and services. Over in the US, the penetration I suppose of online shopping, has been a lot higher than it has been historically in Australia. We’ve been really distrustful of online sites. We haven’t been willing to give up credit card details and other personal details. But it is starting to build a fair bit of momentum and these online sites such as, the auction sites such as eBay and Grays Online and also the discount travel sites and also specialty stores such as iTunes, are getting increased usage and more and more sales. So we expect that the downturn is going to push more people to go online just because there’s so many bargains there. And this is only a good thing when it comes to employment for this particular industry. They’ll need more administrators, particularly site administrators and also sales staff, so people processing sales and that sort of thing. So it will be interesting to see what happens over the course of the year, whether it really booms or whether it just continues to plug along, but there’s no doubt that shopping online is one of those things that’s just becoming more and more a mainstream part of Australian life.
Dobbie: Yeah, and everyone’s looking for a bargain, unless they’re grocery shopping, of course, which for some reason costs you inordinately more if you’re doing it online than it does in store. Hey Richard, I hope it’s a good, year job-wise, for industry analysts and podcasters, because that way we might get a chance to talk again soon. Thanks very much for your time today.
Jeremiah: No problem, Phil. Cheers.
