Job seekers outside of the mining industry are likely to face a much tougher time this year.
AUSTRALIA'S unemployment rate is heading towards a nine-year high of 6 per cent, economists say, with some industries preparing to slash staff and other industries suffering gradual job erosion.
The manufacturing, retail, construction and finance industries are all set to shed labour. At best, this means tepid jobs growth in the economy overall - less than the net 15,000 new jobs needed every month to keep the unemployment rate stable. And at worst, potentially the loss of up to a net 25,000 jobs during the year.
It's not just high-profile job cuts that will cause this expected rise in the unemployment rate, either. While there has been much debate about the 350 jobs to be axed at Toyota and forecast of a potential 7000 job losses over the next two years in the banking industry, in some industries, such as retail and farming, the workforce is being gradually eroded.
The latest industry jobs figures show that 44,800 jobs were lost in the manufacturing industry in the six months to the end of November, but 29,800 were also lost in agriculture and a further 28,100 jobs in retail.
On the booming side of our two-speed economy, the mining industry employs a relatively small 2 per cent of the total workforce, a fifth of those in healthcare. So while mining is expanding rapidly, the number of jobs it is creating - 41,400 in the six months to the end of November - is still less than in healthcare, which is growing to service our increasingly ageing population.
Besa Deda, chief economist at St George Bank, says the jobs market is sluggish at best right now and that the reason the unemployment rate hasn't spiked is because the workforce participation rate has been falling. People have been giving up looking for work, which has kept the lid on the percentage of people out of work - you can't be out of work if you are not looking for it, say the statisticians.
Ms Deda expects the jobs market to get worse.
''Employment is going to be pretty soft, and we expect the unemployment rate to rise to 6 per cent and could even break through it,'' she says.
''Employers are reticent to start hiring given the global backdrop, while manufacturers are under pressure from the strong $A and credit growth is very weak for the finance sector. I think these global worries will continue and we could lose jobs on a net basis.''
Unemployment last peaked at 5.9 per cent in June 2009 at the height of the global financial crisis, and was last at 6 per cent or above in 2003.
Macquarie Bank senior economist Brian Redican says the pressures on the jobs market that surfaced in 2011 have intensified, which is worrying given that last year generated a net zero jobs for the year as a whole.
But he expects 2012 to be a year of two halves, with unemployment to rise in the first six months and then for interest rate cuts to provide stability to the jobs market during the second half. Mr Redican expects the Reserve Bank to cut interest rates next month by 0.25 percentage points, and again before mid-year.
''We think the unemployment rate could rise towards 6 per cent by mid-year but to stabilise around then,'' he says. ''The risk though is that monetary policy is not as effective this time around - households are a lot less confident and may decide to repay their mortgages more quickly rather than boosting spending.''
Mr Redican says a pick-up in building approvals will be the first sign the reduction in the cash rate is going to do its job.
Phil O'Donaghoe, senior economist at Deutsche Bank, is also looking for a rate cut next month and a follow up before July. He says this will keep the unemployment rate at 5.5 per cent, partly because he believes the participation rate will continue to fall.
''The big picture for Australia is still strong, and demand for labour is high here in comparison to other countries,'' he says. ''Yes, the participation rate has fallen to 65.2 per cent, but at the start of 2000 it was at 63.5 per cent, so it's still higher than we were a decade ago.''
But Mr O'Donaghoe says a soft labour market will give soft wages growth and he forecasts 4.2 per cent growth in average wages this year, against 4.6 per cent in 2011.
Alarm bells are already ringing for some industries. Leon Carter, national secretary of the Financial Services Union, has called meetings with the big banks over the next fortnight to find out what's going on in the banking sector.
''There's been plenty of speculation around, almost goading the banking industry to lop jobs off in the thousands, and the worrying thing is that no one is doing anything to allay these fears,'' he says.
Mr Carter says the big difference between the manufacturing and finance is that the manufacturers are shedding labour to restore profitability, while the banking majors are still making huge profits.
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