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Executive Summary

May 2022

Australian Economy booms; executive demand flies high

Business leaders ignore election uncertainty as the economy goes from strength to strength  

The demand for Australian executives surged in April despite the release of higher-than-expected inflation, interest rate rises and European tensions. According to the E.L. Executive Demand Index, the most current employment indicator of any regular economic index, which is showing an April hike of 12 per cent. This gain – the second consecutive monthly increase – leaves the E.L Index at a record high both on base numbers and on a continuous trend basis. Mr Grant Montgomery, Managing Director of E.L Consult, the executive search firm that researches the E.L Index, said: “The E.L Index is on target to reach higher rates of executive employment, even as the general unemployment reaches an unheard of 4.0 per cent. “Generally, the E.L Index runs three months ahead of the general rate of unemployment so we can expect the Australian economy to continue to run hot for some time yet. “The E.L Index result this month ignores the election uncertainty and the Russia/ Ukraine conflict. “Record resource prices and agricultural production are contributing to a strong and growing economy. “The economy is booming and will likely continue to rise despite the general international situation. “Usually, during an election cycle and particularly one when a change of government is widely predicted, employing executives takes a back seat as businesses wait for more political certainty. The E.L Index which analysed using the most current data available on a daily basis show what is happening today and not 3 months ago like most employment data. “What is more, companies only grow their management team when they see a long-term expansion in their businesses as executives are costly to retrench. “It will be interesting to see how the inflation figures play out over the next few months, but it is well known that a little inflation is good for growth. “The Reserve Bank is attempting to get in front of the economy of this with small increases in rates to temper inflation and not end up with an unbridled spiral that could require more severe rate increases. “Just how much of inflation will continue once higher interest rates start to bite is yet to be seen and the effects of the Russian Ukrainian war particularly on world energy prices is anyone’s guess. “The one employment area that only trod water was Engineering jobs, which indicates a slow down on capital investment. Among the other sectors, however, Management and Marketing provided strong increases, followed by Finance. The month saw the overall rise of 12 per cent as a result of an 18 per cent rise in Queensland and a 14 per cent pickup in New South Wales. Victoria and South Australia both rose 10 per cent For further comment please Call Grant Montgomery on +612 9221 6688 or 0414926688

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