How is the Supply Chain job market performing?
13 August 2020
The events of the past few months have had a huge impact on economic activity and people’s livelihoods. The global economy is forecast to contract by 4.5% in 2020 and significant monetary, fiscal and regulatory measures have been put in place in all major advanced economies to dampen the economic downturn.
Imposition of lockdown restrictions had a major impact on industries forced to close due to social distancing restrictions and then gradually as we moved through phases of easing of restrictions these industries have been able to open up albeit with capacity restrictions and Covid Safe practises in place.
Major outbreaks of the virus in specific areas has forced states to close their borders for the foreseeable future which again has a huge impact on industries relying on inbound movement of people such as tourism, hospitality and hotels.
There is some positive news in the economic recovery, and even with major lockdown restrictions being imposed in Victoria, the Australian economy is forecast to perform better than all major advanced economies in 2020.
I have been asked many times what do I expect the impact and outlook to be on the supply chain job market. Is it a protected area given the population still requires products on shelf, factories will still produce and warehouses will still move goods?
There has been some good news in that Australian agricultural exports have stayed strong during COVID-19 due in part to government and industries agile response to fluctuating market conditions.
The retail sector has been on a rollercoaster year with big stock-ups in March (remember the rush on toilet paper!) preceding the lockdown period and a major slump in April and slight rebound following re-opening in May. According to Deloitte Access Economics real retail turnover growth is expected to fall 1.4% in 2020.
Major Australian job board Seek reported that job adverts for the Retail and Consumer products category were at 66.7% of pre-COVID volumes during weeks 26&27 of 2020.
The traditional area of Supply Chain being the “Manufacturing, Transport and Logistics” industry category was however performing at 88% of pre-COVID levels during the same period. The category was ranked third highest out of all 28 categories listed in Seek with an average job volume of 66% or pre-Covid levels during weeks 26&27.
When Seek released their August employment report, the Manufacturing, Transport and Logistics sector was up 9% month on month (highest performing) with particular demand in areas such as assembly and process work, storage and distribution, procurement and inventory.
According to the economic outlook of the latest treasury budget real GDP is forecast to increase 1.5% in the September quarter reflecting an initial recovery in household consumption, albeit offset with restrictions in Victoria.
A big test for both the economy and job market will be the easing of stimulus measures which have helped prop up the economy the past few months. The Job Keeper stimulus currently helps 3.5 million Australians remain employed. The Treasury projections suggest that between now and the end of 2020, 2.1 million Australian’s will be taken off the Jobkeeper payment. Australian job seekers who were earning $1100 each fortnight will see their payment fall to $800 a fortnight in September.
Despite the overall economic landscape navigating unprecedented challenging times, the job outlook for Supply, Procurement and Distribution Managers is strong for the next 5 years (according to JobOutlook – an initiative of the Australian Government National Skills Commision).
Companies are facing unique challenges around re-configuring supply chains and inventory management methods to adapt to very fluid market conditions. Most organisations have experienced a significant drop in turnover in 2020 and that often turns attention towards controlling operational costs and reviewing their own agreements with suppliers for goods and services provision.
Full container volumes imported through Port Botany, NSW in June 2020 were up 13% on 2019 as supply chain’s re-adjust following industries re-opening from lockdown.
There is significant encouragement for supply chain job market prospects here in Australia. The amount of jobs advertised in supply chain has been impacted less than most other industry sectors pre and during COVID-19. Supply chains are buzzing with activity and facing huge challenges to meet customer demand in this new climate.
From August onwards I will be tracking jobs advertised across supply chain and procurement and will provide monthly updates on how the job market is performing.
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