After a big influx of international students and increase in the public service payroll helped the ACT add an estimated 4200 jobs this year, a 5.6 per cent jump, forecaster Deloitte Access Economics predicts the territory's employment growth will decelerate next year to just 1.3 per cent and soften even further to just 0.5 per cent in 2025.
But the effects of the slowdown will be felt more keenly by some parts of the economy than others, according Deloitte.
Report author David Rumbens estimates that next year there will be a 6.1 per cent fall in employment in retail and a 1.1 per cent decline in professional services jobs.
But he expects these losses to be more than offset by a 3 per cent increase in public administration employment which will see the creation of around 1400 jobs, most of them in the Australian Public Service.
The jobs outlook comes against the backdrop of a period of strong expansion in the ACT, which boasted the fastest economy in the nation last financial year.
Canberra grew by 4.3 per cent in 2022-23, far above the national average of 3 per cent and shading the two strongest states, South Australia (3.8 per cent) and NSW (3.7 per cent).
The ACT's gross state product per person increased 2.4 per cent, bigger than any other state or territory and well in excess of the national average of 1 per cent.
The territory's growth was fueled by a 4.3 per cent increase in public administration work as the federal government moved to implement its policy agenda, the Australian Bureau of Statistics said.
There was also a surge a data centre jobs and a strong rebound in travel and hospitality activity following the disruptions caused by the Delta wave of infections experienced a year earlier.
But the ABS figures show that growth across the country slowed in 2022-23 as rising interest rates weighed on demand, a trend that is expected to intensify next year.
The Reserve Bank of Australia forecasts that gross domestic product will slow to 1.6 per cent by the end of the year before a mild pick up in activity during 2024 and Treasurer Jim Chalmers is expected to a similar forecast when he releases the mid-year economic and fiscal outlook in coming weeks.
Mr Rumbens said the slowdown would set the scene for a softening in the labour market.
After adding 405,500 jobs through 2023, the Deloitte partners expects just 75,000 extra positions will be created in 2024 before an improvement to 177,000 additional jobs in 2025.
Despite the economic slowdown, job losses so far had been minimal, which Mr Rumbens said could be because of labour hoarding.
But he cautioned that the labour market was reaching a tipping point.
"Australia has seen real output growth slow a lot more than employment growth, suggesting employers may be hanging on to staff even when they are not fully utilised," he said. "This is often a sensible strategy when employers expect conditions to pick up again, particularly when it has been difficult to attract skilled workers.
But he warned that if the economic downturn is prolonged, bosses may be tempted to dump workers, potentially delivering a "double hit" to employment.
"A hot labour market through 2023 looks like making way for a cool summer entering 2024," Mr Rumbens said. "The first signs of trouble have been through job vacancies, which have fallen significantly. Most labour market indicators suggest a tipping point."
He forecasts the jobless rate will reach 4.5 per cent by mid-2024, with manufacturing and wholesale trade to experience the worst of the downturn, losing almost 50,000 jobs in aggregate next year.
By contrast, health care will continue to grow and contribute to a modest 0.8 per cent increase in the human services workforce.
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