The ABS reported that Australians worked 159 million fewer hours in January than in December and as the numbers are seasonally adjusted, they already account for the high amount of annual leave workers usually take in January.
In January 2021, hours worked fell 4.9 per cent, so it can be suggested that this year’s plunge in work was not mainly due to more workers taking holidays.
“While we again saw higher than usual numbers of people taking annual leave – even more so than last year – the 8.8 per cent fall in hours worked in January 2022 also reflected much higher than usual numbers of people on sick leave,” said Bjorn Jarvis who heads labour statistics at the ABS.
“Nationally, and in NSW and Victoria, the number of people who worked reduced hours because they were sick was around three times the pre-pandemic average for January. In other states and territories, it was twice as many people.
“Western Australia was the only jurisdiction with a usual low number of people working reduced hours in January because they were sick.”
The data revealed that the number of people missing at least a whole week of work due to illness was more than four times the pre-pandemic average, which could be due to isolation guidelines if workers tested positive for COVID.
“January is the middle of summer and usually only around 90,000 to 100,000 people in Australia are away from work sick for an entire week. In January 2022, it was around 450,000 people (3.4 per cent of employed people),” Mr Jarvis said.
“The January 2022 figures are also much higher than in the winter months in Australia, when sick leave has usually peaked in August at around 140,000 to 170,000 people.”
The fall in seasonally adjusted hours worked was greatest in NSW and Victoria (13.5 and 13.2 per cent respectively) where omicron was most prevalent at the time.
Western Australia, which was still COVID-free at that stage, was the only part of Australia where hours worked increased, rising 1.7 per cent.
Although the hours worked plunged, around 13,000 jobs were added last month and the unemployment rate remained at 4.2 per cent, with labour force participation still near record highs.
KPMG chief economist Dr Brendan Rynne said this is a very strong result and reaffirms the underlying resilience of the Australian economy given the ABS survey for January 2022 commenced on 9 January and was collecting information for the following two-week period; the same two weeks that COVID/omicron cases peaked in the country with an average of nearly 90,000 new cases per day during that time.
“The impact of Omicron on labour supply is clear in hours worked, which fell by 8.8 percent on the month. Breaking this down further, the majority of the fall was due to workers working fewer or no hours due to illness – almost 1.2 million people had to take time off in January,” he said.
Dr Rynne noted that although most of the impact from omicron came through sickness, the data also highlighted the pockets of weaker demand that have been reported anecdotally.
“More workers than usual (just under 1 million) reported working fewer or no hours for economic reasons, and this decline in hours worked can be seen through the effective unemployment rate analysis,” he said.
“But this level is significantly lower than the previous waves of the disease, with over 2.4 million workers impacted through the peak of the Delta wave.”
