Employment levels for Australian geoscientists are highly leveraged to the prevailing commodity price. The Australian Institute of Geoscientists has been surveying its member’s employment levels since the start of the year 2009. It is currently the longest, continuous employment survey of its kind. With eight years of data, it is now possible to gain insights into how leveraged geoscientist employment is to fluctuations in the commodity price. The Reserve Bank of Australia (‘RBA’) publishes a monthly index of commodity prices [1],  relative to their importance to the Australian economy.

Figure 1 shows that when comparing the AIG employment and RBA  data, they are highly correlated (~84% in Australian ‘AUD’, and 86% in United States dollar ‘USD’ terms).  The data suggests that employers react very quickly to changes in the commodity price, and there is no strong evidence to suggest that there is a lag effect between movements in the commodity price and full time employment.

By rebasing the data to the conditions as at 30 June 2016 (Figure 2), it is evident the amplitude of the geoscientist employment is muted compared to the commodity price variation. However, the current unemployment rate of 15.9% is very high relative Austalia’s overall unemployment rate of 5.7%[2], before taking into account the additional 20.2% underemployed geoscientists.

The June quarter, 2016 AIG survey results show a small improvement in geoscientist employment levels. The RBA commodity price index also improved over that quarter. Since the end of June 2016, the commodity prices have continued to increase by 6% in USD and 3% in AUD terms.

The ability to quantify and analyse employment levels is important to managing the future needs of the geoscience sector. Consequently, the long standing nature of the AIG’s survey is very useful. Importantly, the AIG’s persistence in maintaining the surveys throughout periods of high- employement provide invaluable context and integrity to any analyses.

Jonathon Bell MAIG
Alexander Research, Perth WA