Small Area Labour Markets

Labour market developments at the SA2 level

Around a third (34.3%) of SA2s recorded a decrease in their smoothed unemployment rate over the year to the March quarter 2025. This is significantly lower than the 47.1% recorded over the year to the March quarter 2024 and is consistent with a softening in labour market conditions that occurred over the period.

Figure 1: The ACT and Western Australia recorded the largest proportion of SA2s with a decrease in their unemployment rate over the year

Annual change in unemployment rate by state/territory and capital city/rest of state areas (% of SA2s).

There was considerable disparity in labour market conditions across the states and territories over the year to the March quarter 2025. For instance, as shown in Figure 1, above, more than two-thirds (68.5%) of SA2s in the Australian Capital Territory recorded a fall in their unemployment rate, while more than three-quarters (80.5%) of SA2s in Victoria recorded an increase in their unemployment rate over the period.

• A slightly higher proportion (34.8%) of SA2s in capital cities recorded a decrease in their unemployment rate, compared with those in rest of state areas (33.5%).

In the March quarter 2025, almost three-quarters of SA2s (74.4%) recorded an unemployment rate of less than 5%, down from 77.4% in the March quarter 2024, while 4.4% of SA2s recorded an unemployment rate of 10% or more, up from 3.7% recorded a year ago.

Figure 2: In the year to the March quarter 2025, there was a fall in the number of SA2s with an extremely low unemployment rate

Number of SA2s by smoothed unemployment rate.

As illustrated in Figure 2, above, the number of SA2s with an unemployment rate of less than 2.0% decreased over the year, from 408 in the March quarter 2024, to 349 in the March quarter 2025. At the same time, the number of SA2s with an unemployment rate of 4.0% to 5.9% increased, from 409 in the March quarter 2024, to 440 in the March quarter 2025. It is worth noting that the number of SA2s with an unemployment rate of 10.0% or more also increased, from 76 in the March quarter 2024, to 89 in the March quarter 2025.

Impact of natural disasters on SALM estimates

The ABS has advised that recent natural disasters in New South Wales and Queensland earlier this year, including ex-Tropical Cyclone Alfred and other major flooding events, resulted in disruptions to the collection of the Labour Force Survey data in some regions in both February and March 2025. To manage the impact of these events, the ABS imputed some sample responses within the Mid North Coast (NSW) and Moreton Bay – North (Qld) SA4s for March 2025 and in the Townsville (Qld) SA4 for February and March 2025. Data for these areas were also affected, at least in part, by temporary suspensions to mutual obligations (see below). In view of the above, March quarter 2025 SA2 and LGA estimates that lie within the affected SA4s, particularly for the unsmoothed series, should be viewed with caution.

Changes to mutual obligation requirements in some areas

Mutual obligation requirements are tasks and activities that people agree to undertake while they are receiving certain types of income support, including the JobSeeker Payment and Youth Allowance (other). From time-to-time, and for a range of reasons, these requirements can be suspended. During the September quarter 2021, for example, mutual obligation requirements were temporarily paused in areas affected by the Delta COVID-19 variant and associated lockdowns. Similarly, mutual obligation requirements may also be suspended in regions that are affected by natural disasters or other major disruptive events.

The suspension of mutual obligation requirements can have an impact on the SALM data. This is because the ABS only considers someone to be unemployed if they are actively looking for work. When mutual obligation requirements are suspended, it is possible that some job seekers may not have undertaken the job search that they normally would have, in which case they would be classified as not in the labour force rather than unemployed.

For more information on mutual obligation requirements, please see the Services Australia website.

Using SALM data - with caution

When using and interpreting SALM data

• Be aware movements may reflect statistical volatility rather than underlying changes in the labour market
• Always use the latest SALM publication
• Where possible, use year-on-year comparisons
• Where possible, use the smoothed estimates
• Be aware that SALM smoothed estimates lag changes in labour market conditions
• Do not derive employment estimates
• Use other data sources in addition to SALM

SALM data can be volatile

Unemployment and unemployment rate estimates at the SA2 and LGA level can be volatile. This is especially the case for SA2s and LGAs that are located within a Statistical Area Level 4 where the ABS Labour Force Survey (LFS) data are also highly volatile. SALM users should take particular care where:

• There are large movements in SALM data
• SA2s and LGAs have a small labour force (less than 1,000)

Always use the latest SALM publication, even for earlier periods

Always use the current SALM publication, as SALM data, even for earlier periods, can be revised.

The ABS rebenchmarks its LFS estimates on a quarterly basis to ensure that they are based on the most up-to-date population information. These revisions are reflected in the latest SALM estimates.

When new Census benchmarks become available, SALM estimates are revised back a number of years to reflect these new benchmarks.

Where possible, use year-on-year comparisons

Quarterly movements in the SALM data may not reflect actual changes in the labour market. We recommend considering year-on-year comparisons in the data.

Where possible, use the smoothed estimates

We recommend that SALM users analyse the smoothed SALM data, given the high degree of volatility that is inherent in small area estimates.

SALM smoothed estimates lag changes in labour market conditions

The smoothed SALM series is created by applying an average to four quarters of unsmoothed data. This means that changes in the smoothed SALM series will lag actual changes in labour market conditions.

While the unsmoothed data are likely to be more responsive to changes in labour market conditions, they are also subject to high levels of statistical variability.

Interpret the unsmoothed SALM series with caution. Even large movements could reflect statistical variability rather than actual changes in labour market conditions.

Do not derive employment estimates

It is not appropriate to derive employment from the figures in SALM. See the SALM Methodology page for more details.

Use other data sources in addition to SALM

We recommend that users also consider other sources of information at the small area level. This is particularly the case for SA2s exhibiting high levels of volatility. Other useful sources of data include:

• The ABS Census of Population and Housing
• Income support payment data

SALM methodology

SALM presents estimates based on the Structure Preserving Estimation (SPREE) methodology. SPREE enables the generation of small area unemployment, unemployment rate and labour force estimates.

Visit the SALM methodology page to find out more about the methodology, source data, and geographical classification that underpin SALM.

View the SALM methodology page

Downloads

PDF publication

The PDF version of SALM is a print-friendly document containing the key information for the current quarter, SA2 and LGA data tables as well as explanatory notes.

Small Area Labour Markets – March quarter 2025

SA2 Data Tables

Smoothed SALM estimates at the SA2 level are available for download in Microsoft Excel or comma-separated values format.

SALM Smoothed SA2 Datafiles (ASGS 2021) – March quarter 2025

LGA Data Tables

Smoothed SALM estimates at the LGA level are available for download in Microsoft Excel or comma-separated values format below.

SALM Smoothed LGA Datafiles (ASGS 2023) – March quarter 2025

Australian, State/Territory and Greater Capital City Statistical Area totals

Estimates for Greater Capital City Statistical Areas, states/territories and Australia can be found in the ABS' Labour Force, Detailed publication. The data in Table 16b of this publication are 12-month averages of direct survey estimates and are comparable with the smoothed SALM estimates. Note that the Australian and state/territory figures will not match the headline seasonally adjusted data released by the ABS each month.

Contact

For more information about SALM, email salm@dewr.gov.au.