Govt bureaucrats lead the way

Australia may be experiencing its first ever bureaucrat-led economic recovery, according to a leading executive index.

The E.L Index reports that governments around Australia are massively increasing their hiring of senior level executive positions in a direct response to the Federal Government’s stimulus package.

Grant Montgomery, managing director of the executive search firm E.L Consult which researches and publishes the E.L Index, said the major increases occurred in engineering, information technology and marketing, showing that for the public sector at least ‘the good times are back’.

He said this is leading to a boom in executive government positions.

‘This is a very interesting trend and significant as government demand traditionally decreases towards the end of the financial year when departmental budgets dry up,’ Montgomery said.

‘Could it be the first bureaucrat-led recovery Australia has ever seen?'

‘This month’s explosion in government engineering positions in particular can be directly attributed to the federal stimulus package as governments rush to invent and launch the planning stages of some massive infrastructure spends.'

‘Hopefully this will flow through to job increases in the general community as some of these projects are contracted out to the private sector.’

However, Montgomery said that what is perhaps less explained are increases, in areas like finance, information technology and marketing.

‘The highest spender in this regard is New South Wales, which clearly leads the pack by a country mile,’ Montgomery said.

‘In every single sector, from finance through the marketing, the NSW government was clearly the largest contributor to the government sector demand increase in May.'

‘Does NSW really need, for example, more marketing people or could this mean that some departments are “pre-hiring” in response to the Premier’s announcement of a potential shake-up and streamlining of the NSW bureaucracy?'

‘The full results will take time to crystallise, but regardless the good news is that executive hiring trends lead general employment — so there is a very good chance that general employment opportunities across Australia will be improved by the Federal Government’s spending.'

‘Everything remains consistent with our previous prediction that the general economy is running near or at the bottom of its cycle and will start to improve in the last quarter this year.’

Montgomery said demand for executives in the private sphere generally dropped during the month, particularly in the financial and marketing sectors but with the governments hiring the national fall was only 5%.

Benefiting from the executive demand gains in New South Wales, the Australian Capital Territory and Western Australia, information technology was the top-performing sector when considering both the government and business sectors. Engineering was strong while the beleaguered financial sector fell only 1%.

‘It’s particularly good to see the financial index have a relatively flat result [–1%] as it has so many connections with the rest of the economy,’ Montgomery said.

‘Failing more severe shocks, we can be relatively confident that the decline in financial positions has plateaued.'

‘As companies lower staff numbers, information technology spending is looking like an efficient investment which can be sold to corporate boards.'

According to the Index, Western Australia was the only state to move upwards on aggregate, with all other states registering mild losses.

‘This is possibly because the fall of the resources boom has been considerably oversold, and China is still buying strongly even if it is for inventory,’ Montgomery said.