so back of the envelope calculation base on the above…
assumptions (trying to err on caution rather than uber bearish)
60% of Irish construction jobs residential and total construction employment dropped 10%
pretending all the drops were applied to residential only then its 16 point something % drop
lets pretend 40% of aussie construction is real estate and employment in construction drops 10% too, lets drop aussie residential construction workers by 16% like happened in ireland - you expect 70k job losses in the first year or the unemployment rate to rise by 0.58% before we account for supply chain, knock on effects in retail (which is being hammered by the loss of the wealth effect already) etc etc
It would probably be possibly to work out the reverse multiplier effect/not sure what you`d actually call it from the irish/US experience. How many jobs rely on a construction job etc. The effect on wider employment from the lost wages/supply chain etc
Old figures from 2007 and the market has been quite distorted since, nevertheless its a fitting guide in a back of the envelope type way:
so that would infer a cascade of 350k jobs lost (probably not in the first year as multiplier jobs would ‘hang on’ longer).
based on the above 37 jobs for 9 construction jobs i.e 4 jobs for every construction job. So 70k construction + 280k other jobs = 350k. Or 2.9% rise in unemployment in a country with a labour force of 12 million.
That would lead to a rate of 8% unemployment (aussie unemployment is 5.1% now abs.gov.au/ausstats/abs@.nsf … t&ref=HPKI ) with some areas doing worse and other better. It ignores the possibility of the mining industry coming to the rescue and damping that down too.
The third order effects start to kick in then - banks under pressure from NPLs. Spending (immediate loss of jobs and deleveraging as panic sets in) and tax take way down. A budget crisis with the knock on effects that has both to services and the multiplier effect.
It’s not bound to happen, but why would it be different? Currency? Well, cheapening the Aus Dollar would increase inflation. The Central Bank could a) respond with interest rate rises, probably not wise or b) endure stagflation to ease the debt burden.
Stagflation is a pretty miserable state when there’s no wage bargaining power; effectively it’s what the UK went through - lowering living standards by failing to keep up with inflation in an economy that’s contracting.
There is so much labour excess that skilled migrants are working in casual part time roles. This has been well documented in the past few years. A true and epic race to the bottom.
On top of this a free trade agreement with Indonesia has been signed. Tax free imports of Indonesian goods with greater access to the Australian labour market for Indonesian workers while Australia exports are given lower tax treatment. So much for free trade.
Australia already has form for dropping in foreign labour to the outback to work on projects, this is from 2016:
^^Amazingly the woman saying Aussies should work for $2 a day is a billionairre. Now doesnt that make Trump sound like an absolute hero in comparison to even the biggest Trump critic? Crazy/apalling/mind boggling. She also called for designating northern australia as a special economic zone, not like say Shannon, more like Zimbabwe:
Which of course doesnt make sense since the housing industry is saying dont let up on the migration to Sydney and Melbourne. But of course the politicians are finding it very hard to ignore peoples complaints of overcrowding coming up to an election. Try square that circle.
Interesting to note that as things squeeze the top selling utility/pickup vehicle (the tradesman vehicle for Australia) is one of the cheapest on sale - previously the top seller was one of the most expensive (the ford ranger). These pickup 4x4s are used here to carry tools like a transit van in Ireland with the exception that they often go off roading in the outback/on beaches etc on weekends/holidays etc. This led to a trend where people who just wanted to go off roading, but arent trades, purchasing these vehicles instead of family cars.