Chicken then Egg on Structural Change

An interesting thought on the structural change  we are experiencing. March sentiment survey from the Master builders Association indicates builders are expected to reduce their workforce. Calling on the RBA to cut rates the association reported new home sales and enquiry levels were weakening, and traffic to display homes was poor. MBA chief economist Peter Jones took the time to point out  that although there were strong employment gains in the less labour-intensive engineering sector it was not enough to outweigh significant job losses in the stagnant residential and declining non-residential building sectors. More…

Now first of all, it must be heartening to those in the retail sector not being alone in facing challenges in the marketplace, secondly, clearly there is a transition occurring between housing and engineering industries which our labour market is adapting to. Thirdly, and the most interesting thing, where will the need for new housing and accommodation spring from? You guessed it, the ongoing and substantial engineering works taking place. The upshot? Our economy is constantly in progression, unfortunately it’s our labour market which has to adapt or die.

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