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The Victorian Economy is growing

  • The Victorian labour market comprises around 3.5 million people, an increase of nearly 700,000 in the last decade.
  • An estimated 373,000 additional workers are forecast to be needed in the next three years to meet demand from new jobs and replace retiring workers by 2025, including 82,400 in regional Victoria.
  • Highest expected demand for additional workers is in services (90,000), health and community services (64,700), and professional, financial and information services (63,600).

Workforce supply is constrained by multiple factors

  • Prior to COVID-19, Victoria averaged nearly 88,000 net arrivals from overseas per year. During 2021, Victoria experienced net departures of approximately 56,000.
  • In 2021, 18,000 more people left Victoria than arrived from other states and territories, compared to net arrivals of 47,000 across the previous four years. Some areas in regional Victoria benefitted from internal migration.
  • In early 2022, employers reported that both now and throughout recent lockdown periods, between 10 and 20 per cent of their workforce were unable to work due to contracting the virus or needing to care for loved ones with COVID-19.
  • The number of workers who in the last three months to-date left their job for a better one or for change is 45 per cent above pre-COVID levels.
  • In 2021, the number of non-working age people relative to working aged people was 52.5 per 100. Due to the ageing population this is expected to increase to 56.6 in 2050 and from 65.7 to 73.6 in regional areas.

Shortages are present and likely to become more acute

  • As of February 2022, there were more than 72,000 vacancies, a level not seen since 2008. Similarly, unemployment around 4 per cent is at levels not observed in more than 40 years.
  • A total of 143 different occupations were identified as in shortage, with most shortages occurring in construction (28), services (16) and health and community services (15).
  • Eight out of nine Victorian Regions had an unemployment rate below metropolitan Melbourne as of December 2021.

Participation and productivity can drive future prosperity

  • Participation has lifted from 63.0 to around 67 per cent since 1992. Female participation has risen from 52.6 per cent to around 62 per cent and Male participation declined from 73.7 per cent to around 72 per cent.
  • In February 2022, there were an estimated 1.75 million people not in the labour force, with 876,000 permanently not intending or unable to work. Of the remaining 899,000, an estimated 195,600 wanted to work, are available within four weeks to take up work, but are not actively looking.
  • In February 2022, 222,600 people were underemployed, and these workers indicated a preference to work an additional 3,031,700 hours. This is equivalent to almost 7,000 full-time jobs.
  • Of employers surveyed recently, 83.8 per cent indicated they believe they have the skills they need in their workforce to function now while only 79.2 per cent believe they have the skills for the next 12 months.
  • Of the same employers surveyed, 60.6 per cent indicated they supported staff training in the past 12 months, either by paying for the training or providing staff with the time off to engage in the learning.
  • National productivity performance has increased over the decades and Australia sits in the middle of OECD rankings1. Since 2013, Victoria’s Gross State Product (GSP) per capita has been below the Australian average.

Data note*

References

1 Australian Government Productivity Commission, PC Productivity InsightsExternal Link , March 2022.

* Industries are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC).

In this publication, some industries have been amalgamated as follows:

  • Service sector includes: Accommodation and Food Services, Arts and Recreation, Retail, Other Services and Wholesale Trade.
  • Professional, financial and information services includes: Financial and Insurance Services, Information, Media and Telecommunications and Professional, Scientific and Technical Services.

Note that data is correct and reported as of May 2022. Later releases of data will be incorporated into future updates of the Victorian Skills Plan.

Reviewed 06 September 2022

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