Computer Experts Lead Jobs Exodus

Sydney Morning Herald

Wednesday November 29, 2006

John Garnaut Economics Correspondent

SYDNEY is being emptied of computer experts, manufacturing workers and real estate agents, Bureau of Statistics figures show.

The city has lost 16,000 computer professionals since it hosted the Olympics in 2000 - a quarter of the industry workforce.

It has also lost 10 per cent of its real estate agents and manufacturing workers.

The study by Monash University's Centre for Population and Urban Research goes some way to explaining Sydney's boom before the Olympics and economic torpor since.

Property and business services created 107,000 new jobs - three out of five of all new jobs - in the five-year residential and infrastructure building boom leading to mid-2000.

The sector expanded by 52 per cent in the five years to 2000 but by only 0.9 per cent, or just 3000 jobs, in the next five years, as the residential property boom turned to dust. Tellingly, the number of Sydney real estate agents has dropped by 2400 to about 20,000.

The figures challenge the theory that Sydney's jobs market is hitched to its status as a global gateway. Instead, job trends appear to have been dominated by the local property industry for a decade.

"Maybe Sydney's role as Australia's interface with the global economy was not driving the city in the late 1990s," said Bob Birrell, a professor of demography and director of the Monash centre. "[These] data suggest Sydney is much more hostage to industries associated with the property market than was previously thought."

The analysis by Professor Birrell, Ernest Healy and Fred Smith compares snapshots of the Melbourne and Sydney labour markets in 1995-96, 2000-01 and 2005-06.

The detailed figures were commissioned from the Bureau of Statistics and averaged over each year to avoid statistical volatility.

They show the job costs of globalisation to be more visible than the gains.

The number of finance and insurance jobs has expanded by 30,000 to 143,000 in a decade, as Sydney has grown as a regional financial centre.

But these new jobs are more than offset by 36,000 lost manufacturing jobs, associated with China's growing dominance of world manufacturing.

The sharp contraction in Sydney's computing industry can be partly explained by industry-specific factors such as the millennium bug, the introduction of GST and the end of the technology investment boom.

The authors also point to the large numbers of temporary IT staff and "the trend towards offshoring IT contract services".

But none of these reasons explains why new computing jobs were rapidly created elsewhere.

Sydney's share of the national computing workforce has fallen from 40.6 per cent to 34.3 per cent in five years.

After leading the country in the late 1990s, Sydney's job creation record has lagged every other capital's since 2000-01. It would have been worse if not for generous hiring in government services.

The bureaucracy, defined as government administration and defence, expanded by 23,000 jobs, or 40 per cent, while 25,000 new jobs were created in education and 30,000 in health and community services.

© 2006 Sydney Morning Herald

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