The health sector has become the biggest employer in Australia, as population growth and ageing demographics helped double health-related jobs over the past decade.
The "surprising" divergence in sectoral employment saw 13% of the country's 12 million jobs coming from the health sector, and is likely to exceed 15% as a disability insurance scheme expands, according to Commonwealth Bank senior economist Michael Workman.
"In our view it will be the predominant sector in coming decades," Workman said in a note today following Australian Bureau of Statistics' job vacancies report for the November quarter.
Demographic and household spending trends "indicate that health and its allied areas like fitness, pharmaceuticals and cosmetic procedures, will continue to grow by more than the overall economy", he said.
Jobs in the health sector have increased to 1.5 million (13% of the workforce) from 765,000 (9% of the workforce) in 1996, Workman pointed out.
Workman said Australia's labour market sees the predominance of part-time, casual, contract-based and relatively modestly paid jobs, as both the public and private sectors focus on cutting costs.
That's a contrast to the traditional full-time positions available in the previous decades, and doesn't bode well for new job seekers, he said.
In the health sector, only 55% of its jobs are full-time, similar with other faster growing services sectors, such as professional services in accounting, legal and property, and accommodation, cafes and restaurants.
"They tend to have a much higher proportion of part-time jobs than the economy-wide average of 32%," said Workman.
A relatively weaker Australian dollar has also supported the revival of the manufacturing sector, with manufacturing jobs rising 100,000 or 12% over the past year to account for 7.8% of the workforce.
Higher job vacancies
Job vacancies in Australia rose by 2.2% in the November quarter, taking the annual growth rate to 8.9%, according to the ABS.
That should ease pressure on the national unemployment rate, as the vacancies trends suggest that average monthly jobs growth may range from 12,000 to 16,000 over the next few quarters, Workman said.
"We expect the unemployment rate to be around the 5.5% level by year end, from its current 5.7%," he said.
Notably, Queensland has seen signs of improvement that could be due to stronger residential construction and higher coal prices since mid-2016.
Stabilising vacancies in Western Australia will support jobs creation by mid-year, while higher iron ore, nickel and gold prices will help lift employment over the coming year, Workman said.