AI adoption slowing Australian jobs growth: NAB
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The news: The adoption of AI has slowed the growth of highly AI-exposed industries like finance and insurance, ICT and software and professional services since the release of ChatGPT in late 2022 according to NAB economists.
The numbers: Growth in highly AI-exposed jobs has been slower compared to low-exposure in the post-2022 period. The NAB analysis found that employment and hours worked in high-exposure jobs is around 9% lower than in low-exposure jobs.
The report flagged that “for each 10% of an occupation’s tasks that are automatable by current GenAI capabilities, the employment has been 2% slower compared to minimally-exposed occupations”.
At a high level, about 15% of jobs in Australia are considered “highly or significantly exposed to AI”.
The research also found that 42% of Australian businesses are using AI with a further 14% planning to use it. The industries with the highest AI utilisation rates are property services (69%), finance and insurance services (64%) and business services (61%).
The context: Pharma and R&D intensive sectors are considered to have medium to high exposure to AI. Frontline retail, manufacturing and healthcare are considered to have medium exposure. Construction and agriculture have low to medium exposure while hospitality and personal services has low exposure.
Given it is predominantly white collar jobs that are affected by AI, there could be a relative repricing of labour, shifting relative wage outcomes in favour of blue collar jobs.
While the economists noted that it is difficult to draw a causal link between AI and jobs growth, particularly as it coincided with a post-Covid pandemic slump, they said “the underperformance in AI exposed occupations since 2022 is clear”.
However, they are still unsure the extent to which AI will end up driving productivity or cause a significant increase in unemployment, with the rate of change highly dependent on the ability of firms to integrate the technology into their work flows.
The economists noted that “despite a strong 80% rise in business information technology investment over the past decade, overall productivity growth remains modest”.
What they said: NAB group chief economist Sally Auld told Capital Brief “most people’s sort of working assumption is that will probably mean slower employment growth and a higher unemployment rate” but it’s important to recall that an ageing population is leading to shrinking labour supply.
Auld also flagged that “if we all think that AI is going to boost productivity across the economy, that lifts real wages and by extension aggregate demand, and if you have more aggregate demand, that’s a positive demand shock, or else equal, you probably need more labour to fulfil that”.
“So, there are so many different cross currents in all of this, which sort of gives me some sympathy for central banks not wanting to nail themselves to the mast and have a strong view about how all this plays out,” Auld said.
The source: NAB media release
