industries that have contributed the most to employment growth over the past two years are health care & social assistance, construction and ( perhaps more surprisingly ) manufacturing ( graph 2 ) : the increase in health - related jobs reflects both longer - term trends, such as the ageing of the population, as well as the rollout of the national disability insurance scheme over the past couple of years. construction employment is close to 10 per cent of total employment, and this is around its highest share of employment since the 1920s. construction employment has been supported by the large amount of activity in residential and infrastructure construction, particularly in the eastern states. more recently, there has been a noteworthy increase in manufacturing employment. this is a result of export demand for high - quality food and beverage products, demand for manufactured goods from mining - related activity as well as the high levels of residential and infrastructure construction. this more recent pick - up in manufacturing employment takes it back to its level around 2011. professional, scientific and technical ( pst ) services employment has also grown strongly over the past year, driven by computer system design and management consulting. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 3 / 13 10 / 17 / 2018 the state of the labour market | speeches | rba graph 2 the labour account data provide an alternative perspective on where the jobs growth has been. for example, businesses report that the number of jobs in construction has not increased anywhere near the extent that households have reported over recent years. this may be because construction workers hired or contracted out by labour hire or business services companies will not be recorded as construction workers in the labour account. similarly, in answering a household survey, someone working for a professional services company who is deployed to a bank may think of themselves as working in the finance sector rather than in professional services. there is no ‘ right ’ way of measuring this. it depends on who you ask and what question you are trying to answer. what sorts of jobs have been created in terms of pay? drawing on the data from the ( more than ) 450 occupations tracked by the abs, our assessment is that employment growth has been reasonably evenly distributed across pay levels over the recent period. there has been relatively strong employment growth in occupations with above - average rates of pay, such as jobs within health care, it and engineering. but within the household services sector, employment growth has been strongest in occupations with below - average

beveridge curve. a possible explanation for this would be an increasing skill mismatch between unemployed workers and available jobs. structural changes in the labour market as a result of changes to participation, technological change or those stemming from a shock such as the mining boom can contribute to a mismatch. lower mobility, either geographical or at the job level, can also reduce the ability of firms to find the appropriate worker. this last explanation seems unlikely given the relatively large net interstate migration flows we have seen as conditions in the state labour markets have varied, most notably the large flows in and then subsequently out of western australia. finally, it may reflect underinvestment in training over recent years, including in technical skills. that said, the vacancy rate is currently at its highest relative to the size of the labour force. that too is a very positive signal for the labour market outlook. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 11 / 13 10 / 17 / 2018 the state of the labour market | speeches | rba graph 10 conclusion to sum up, the labour market is in pretty good shape : employment growth is above average, the participation rate is at a high level, the vacancy rate is at an all - time high and the unemployment rate is falling. however, the long - term unemployment rate has been little changed of late and wages growth remains low. the near - term indicators suggest demand for labour remains above average and the expected growth in the economy over the next few years should gradually reduce the spare capacity in the labour market. as we have stated many times, we expect that will lead to a gradual increase in wages growth and, in turn, inflation. there are a number of uncertainties around the extent and timing of the decline in the unemployment rate and the pick - up in wages growth. the recent international experience indicates that the unemployment rate could decline further than historical experience would suggest before we see a material increase in wages growth. but against this, further increases in labour demand may be met more from the pool of unemployed rather than from people not currently in the labour force. that is, the unemployment rate may decline faster than we expect, rather than the participation rate increase further. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 12 / 13 10 / 17 / 2018 the state of the