Sydney’s second lockdown is hitting jobs harder than its first

The extended lockdowns in Sydney have hit its payroll jobs harder than last year’s lockdowns, with construction jobs hit significantly hard. This is according to an analysis by the Australian Payroll Association published today (30 August).

It says payroll jobs have fallen by almost 9 percent in Greater Sydney since lockdowns began and, in the same period, payroll jobs decreased by almost 4 percent across New South Wales as a whole.

In the construction sector, which was closed in its entirety for a short time in Greater Sydney, payroll jobs across NSW fell by more than 22 percent.

The Payroll Association quotes Westpac economist Justin Smirk as saying it’s clear the city is suffering, with the economic damage gaining momentum.

Negative momentum in Sydney is accelerating

“Sydney is being hit at least as hard, if not harder, this time than it was in early 2020,” Smirk wrote in a note to clients.

“Sydney payrolls contracted 4.9 per cent in the last two weeks to be down 8.9 percent since the start of the lockdown. In early 2020, the peak-to-trough in Sydney payrolls was -8 percent. It does appear that the negative momentum in Sydney is accelerating.”

However, Smirk noted that some care had to be taken with the payroll data, because of changes the Government had made to disaster relief payments for these lockdowns.

The Payroll Association says the Australian Bureau of Statistics (ABS) classifies payroll jobs as employee jobs for which a payment is recorded through the Single Touch Payroll system to the Australian Tax Office. Payroll data therefore counts jobs, not employees.

The payroll series is thus different from the ABS’s monthly labour force survey, which counts the number of people employed, rather than the number of jobs.

Payroll statistics could be skewed by changes

This lockdown is different from last year’s lockdown in at least one major way: In the 2020 lockdowns, workers received emergency government support from JobKeeper, which meant they were ‘paid’ via their employer through the payroll system and considered employed.

But this time things are different, and Covid disaster payments are paid directly to workers, not via employers.

Meanwhile, the Head of Labour Statistics at the ABS, Bjorn Jarvis, said in the last fortnight of July construction had shown the greatest share of payroll job losses across the country.

“The latest fortnight of data coincided with increasing restrictions in the fourth and fifth weeks of the lockdown in New South Wales, including a pause in construction activity,” Jarvis explained.

New South Wales accounted for the largest share of national job losses in all three industries with large employment (accommodation and food services, retail trade and construction). NSW accounted for around half of payroll jobs lost in accommodation and food services, around two-thirds in retail trade, and around three-quarters in the construction industry, the ABS said.