Random Analytica

Random thoughts, charts, infographics & analysis. Not in that order

Month: August, 2013

QuikStats: Invocare & Australian Deaths 1989 – 2011

It’s a ‘Mr. Death’ or something. He’s come about the reaping? I don’t think we need any at the moment. (Monty Python, 1983)

Last Sunday Michael Rowland hosting Inside Business made light of the funeral industry. Recent comments by Andrew Smith, CEO of Invocare, Australia’s largest operator of funeral services provided the opening when during an investor presentation he pointed to lower than projected H1 mortality rates had created a “headwind” for the company.

Andrew Smith went on to state “In terms of an operating result this has been a challenging first half with the number of deaths and market share falling below expectations in Australia and NZ,”.

These comments were reflected in the Investor Presentation which noted that:

  • Comparable funeral case volume growth of 1.3% at April YTD dropped to decline of 0.7% by end of half (June).

An unseasonably warm winter in Australian seems to have caused a slow down in deaths across the country this year. It must be a significant drop to impact the forecast revenues of Invocare who seemed to be tracking well to the start of autumn.

Here’s a look at Australian Deaths (Male/Female) from 1989 through to 2011.

1 - AustralianDeaths_1989~2011_130830

The really surprising finding from this QuikStat was that I could not readily access temporal pattern data (that is deaths by month). I would think that this type of data would be becoming more useful due to the possible impacts on mortality from climate change. Of course, that’s not to say that there isn’t any done but it would certainly require more digging.

As for Invocare, they believe that the FY 2013-2014 offers further challenges with a summary point noting that the number of deaths will be below expectations in Australia and New Zealand!

Let’s just hope that Andrew Smith doesn’t end up knocking on your door to discuss the ‘reaping’ anytime soon.

Update (31/08/2013)

  • Michael Rowland responded to the article with the following tweet. As it turns out he is not just scripted funny (but the real deal). My thanks!

2 - mjrowland68

Random Analytics: Manufacturing Workforce Planning Scan (FY 2012-2013)

The Manufacturing Workforce Planning Scan is a quasi-quantitative report card built from relevant online industry magazines and media sources. Utilising 15 category metrics the scan collates relevant stories over a period of time (in this case a Financial Year) to give a picture of how the industry is positioned from a workforce planning perspective.

The Slow Atrophy

Before we look at the last 12-months of Workforce Planning data I thought it might be useful to look at the previous two decades of manufacturing employment and three possible future scenarios over the coming decade.

1 - Manufacturing_1994~2023

In 1976 Australia had approximately 1.7-million manufacturing workers, by 1994 this had reduced to 1.12-million and in February of 2013 this had reduced further to just 954,200. In the graph above the 1994-2013 data is represented by a black line (corresponding with ABS yearly averaging through to 2012 then SkillsInfo data as at Feb 2013. The SkillsInfo data parallels with the very early election timeframe as put forward by Julia Gillard, the previous Prime Minister).

Scenario One: The blue line shows an increase in manufacturing employment of 95,420 over a period of 10-years is a highly optimistic variant and goes against a four decade trend. Some of the reasons why this scenario is unlikely include continued off-shoring of Australian manufacturing, increased productivity without increased employment through Automation/Augmentation take-up and a continued slow decline in family business manufacturing.

Scenario Two: The green line shows a continued decrease of manufacturing employment by 8,375 per annum which is the 20-year average of atrophy in the manufacturing sector.

Scenario Three: The maroon line shows a hastened decrease of manufacturing employment by 35,420 per annum to just 600,000 in line with recent comments by Bernard Salt who stated:

“If you go back to 1976, that figure was around about 1.7 million so over a quarter of a century we have gone from 1.7 to under a million and in 10, 15 or even 20 years’ time, we’ll still be making stuff but we might not need 980,000 workers,” Salt says.

“We might only have 600,000 workers and we might be making bricks and beer, stuff that’s too hard to bring in from overseas at an effective rate, or it might be high tech products that only the Australian market can make.

“But in either case, the continued diminution of the manufacturing I would see – not elimination but continued erosion.”

In all fairness to Bernard he didn’t put a timeline on the reduction to 600,000 but it would be my guess that by 2023 the number of Australian’s employed in manufacturing will be somewhere between the green and red lines with a weighting toward the red line.

Here are the manufacturing analytics from financial year 2012 – 2013.

Workforce Planning Categories

2 - Manufacturing_Categories_2012~2013

The following chart is 12-month look at 15 manufacturing related workforce planning categories and the amount of times it features as a story.

Employment was the leading category for eleven months of FY 2012-2013 with 203-stories and a monthly average of 33.6%, slightly more than 1/3rd of all stories with relevance to workforce planning. With the constant atrophy of employment in the sector the weighting should have been greater (and more negative) but I believe there is an element of job-loss fatigue in terms of a sector theme.

IR (Industrial Relations) was the only other category to be a leading indicator, with 14-stories (31.1%) in August 2012. This corresponded with commentary on the Fair Work Australia and manufacturing reviews and strikes at BlueScope Steel, Volgren, Forgacs and ongoing tension with the Grocon development in Melbourne.

WH&S (Work Health & Safety) was another leading indicator, finishing as the second leading indicator six-times and in the top-3 on eight occasions. With all the emphasis on safety within Australia it’s often forgotten how dangerous a lot of manual, repetitive manufacturing work is. During the FY 2012-2013 period there were 1,302 deaths and 954 injuries reported including seven deaths in Australia. The most notable (and horrific) was the collapse of the Bangladeshi factory which killed at least 1,129.

Positive/Negative Index

3 - Manufacturing_PosNegIndex_2012~2013

The next chart is a 12-month look at 15 manufacturing related workforce planning categories and their positive or negative weighting.

Employment was the most negative sentiment for FY 2012-2013. Officially the decrease in manufacturing employment was just negative 0.3% for the period Feb 2012 – Feb 2013 and negative 1.6% over the past two years. The sentiment of stories that I’ve reviewed and the recorded job losses against job gains both paint a slightly darker picture.

On a more positive note L&D/R&D, which measures both Learning & Development and Research & Development indicators was the most consistently positive with 59-stories and a monthly content average of 10% it had the highest sentiment on seven occasions. One of the positive themes behind Australian manufacturing is that although it is under immense pressure there is a lot of good news in terms of adjusting the workforce for its new challenges and in developing new solutions for modern manufacturing. It probably should also be noted that I state ‘good news’ in terms of L&D/R&D outcomes rather than ‘effective news’, a much more difficult proposition.

Engagement, which looks at everything from engagement at the worksite through to industry engagement to promote employment had the highest sentiment reading for FY 2012/2013 with a +9 recorded in May 2013. This corresponded with the National Manufacturers Week and the Endeavour Awards and is a good indicator that these two events raise awareness of manufacturing.

Manufacturing Employment Gains & Losses

4 - Manufacturing_Employment_2012~2013_130830

The following table looks at the reported employment gains and losses. Reported job losses are actuals as reported by manufacturing industry sources but often do not reflect the total loss of employment as some companies choose to limit the amount of information in relation to redundancies. Employment gains are forecast only. . Often employment gains are overstated as they link to public relations exercises.

For every forecast job announced in manufacturing for the period July 2012 through to June 2013 there were approximately 9-times the amount reported lost.

A bellwether story for manufacturing over the past year is the Gladstone’s Boulder Steel project. Announced with great fanfare in November 2012 forecasting 3,800 jobs (2,000 construction plus 1,800 operational FTE’s) it was quietly shelved when the company went into administration just eight months later.

Final Thoughts

The overall theme behind FY 2012-2013 has been one of continued slow atrophy.

The biggest development of the year, that of Boulder Steel was announced and shelved within a couple of quarters even as the Australian dollar came down of a very long high. This was a big story and a ‘nothing ventured, nothing gained’ outcome.

Outside of Boral which cut more than 1,000 during the FY and Ford which will close down in 2016 with the loss of 1,200 FTE positions most companies reported losses in the scores and hundreds. All of this added up to a number greater than 11,600 and that’s just the reported count, not all the SME’s who are quietly cutting in the background out of the public eye.

I’ve talked and written often on peak employment but when it comes to manufacturing in Australia that is a moot argument (especially given the peak period of Australian manufacturing was four decades past us).

As Q1 FY 2013-2014 starts off with an election and an ideological battle between political parties over the fate of automotive manufacturing in Australia the real question will be where will be floor level of manufacturing employment be in Australia?


Acknowledgements: Although not the only sources utilised the Manufacturing Workforce Planning Scan’s primary data sources include Manufacturing Monthly and Business Spectator. If you are interested in other sector analysis my recent Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (July 2013).

Random Analytics: Egypt – A Workforce Planning View

Back in February 2011, at the height of the Arab Spring, I wrote a blog about Egypt which received a lot of criticism at the time.

With the passage of time however it seems that my worst fears are now becoming reality.

Here is the original piece (20 Feb 2011) titled Egypt: It’s about the Economy and Work, not Democracy via HR.com.

I have a vivid memory of my final year at university.

I was giving a review on Dr Michel Aung-Thwin’s work “Parochial universalism, democracy Jihad and the orientalist image of Burma: The new evangelism” and was rounding up the argument that without security first democracy cannot work, especially in the Asian context. At the end of my presentation one of my fellow students jumped up from his seat and said forcefully that I had ‘crapped on the ideals of democracy and I was a disgrace to the university’. He subsequently stormed out of the lecture room without giving me a right of reply and I went on to get a high distinction in the subject.

Dr Michel Aung-Thwin argued that without economic and physical security you cannot have democracy, or at least a democracy that will last over the longer term.  His work in relation to Burma in the early part of the previous decade is relevant to the issues facing the Middle East and Northern Africa today.

The crisis gripping that region, commencing in Tunisia and Egypt but now impacting other states such as Libya, Yemen and Bahrain is more about the economy than it is about democracy.

Let’s consider the short-term economic implications for Egypt (and they are bleak):

In Egypt the population wants a rapid normalisation but after a month of protests, a significant loss of foreign income (reportedly $300M USD per day) and a military Junta in place, at least until September this is unlikely. A week after the democracy protests ended there are now protests in relation to pay and conditions and many of the key elements of the economy are closed, including financial institutions and many businesses. The Global Financial Crisis has hit Egypt hard and rising inflation, especially rising food prices are hurting the poorest first.

However, the long-term Workforce Planning implications for Egypt and the region are bleaker:

The median age (that is the age at which half the population is older and half is younger) for the West is approximately 40 (Australia has a median age of 36.9 while in Japan that rises to 44.6). Due to a 3 – 4% population growth in the Middle East and North Africa the median age is much lower. In Tunisia that corresponds to 29, Egypt 24, the West Bank and Gaza 20 and in Yemen just 17.  In Saudi Arabia, a rich country that imports most of its working population from the poorest regions of the world around 70% of the population is sub-30.

In Egypt 80% of the population with an age of 29 or less are unemployed. Gender disparity, an issue common to the region is also worrying with only 18% of women out of university finding employment, while for men the rate is 50%.

Recently the International Labour Organisations estimated that the Middle East and North Africa region alone would require 100,000,000 million new jobs to fulfil the requirements of the new entries coming into the system by 2020!

Workforce Development is also an issue. Egypt has an education system which is poorly staffed (teachers in the Middle East are poorly remunerated and trained), poorly maintained with aging infrastructure and legacy curricula but heavily attended. For those who can afford to get a university education in Egypt they then have issues finding employment. Dr Hassan Hakimian, the Director of the London Middle East Institute recently discussed the fact that is takes a university graduate up to 15-years on average to enter the state or public sector.

If you consider this from a Workforce Planning perspective then someone who has worked in a sector or industry for 15 to 20-years in the West would be considered mid-career and perhaps looking to move on to something else or moving up into a higher level of management. In the Middle East and North Africa it may just take this long to get into the system and this will have ‘lag-effect’ issues. One obvious ‘lag-effect’ will be the best and brightest in Egypt and other parts of the region will look to the West for employment opportunities. Why wait until 2026 for a job?

Egypt has a long history of expelling Pharaoh’s from power that couldn’t provide sustainable conditions for the population. Mubarak and his aging cohorts in Egypt are just another dictatorial link in that chain.  The challenge, initially for the Junta but over the longer term for any democratically elected government in Egypt will be to normalise the economy and to get people working again.

If they don’t then the issues facing the region will be far graver than what we are currently witnessing.

As confronting as these statistics are the data has not improved over the past 30-months.

There is no doubt that the Egyptian military (a significant business entity in its own right), followed by the  democratically elected government of Mohamed Morsi and in recent months the interim government post overthrow have not been up to the challenge of improving the economy and getting Egyptians working again.

To emphasise this point here is a look at the official Egyptian unemployment data since 2007.

1 - EgyptianUnemployment_130815

It should be noted that the Central Agency for Public Mobilization & Statistics only counts those ‘individuals who are actively looking for a job but cannot find work’. Given the facts that I presented in early 2011 I would guess that the participation rate in Egypt is staggeringly high, yet official movements in unemployment are still very good indicators of the health on any economy.

I’m not a country specific specialist (outside of Australia of course) but I am a Workforce Planning specialist and the facts that I stated in 2011 have not changed. In fact I would suggest with the continued political instability the situation that I described back then with a further 1.5-million Egyptians looking for work and unable to find it is now worse.

With the very real possibility of Egypt on the brink of large scale violence, even civil war the situation is no longer just grave.

It’s a disaster.

Random Analytics: H7N9 (August 2013)

1 - H7N9_Infographic_130814

***** Please note that the infographics/charts of the Avian Influenza A(H7N9) virus presented were updated with public source information to 0001hrs 13 August 2013 CET/EST *****

Infographic Details

The recent confirmation of a H7N9 case in Huizhou, Guangdong Province was the inspiration for this month’s infographic.

During the month of July there were two confirmed cases of H7N9. The first case, with a 10 July onset occurred in Langfang with a dispersed population of around 3.9-million located just 60-kilometres from the heart of Beijing and its 20.7-million residents. The more recent case with onset 27 July was in Huizhou, with its 4.6-million citizens and just 100-kilometres from Hong Kong (population 7.1-million).

After a brief sojourn this variant has decided to randomly strike at two locations within a relatively easy drive to two extremely connected and globally linked population centres. Just these four cities alone are more than 50% more populated than the entire land mass of Australia and 1.8-million more than Canada.

The other point that I wanted to make was to highlight the temporal pattern which now has six-months of data confirmed. Since April, where 70.6% of the current onsets were recorded, only four cases (two in May, none in June and two in July) have occurred.

The Northern hemisphere summer has not killed of H7N9 although it is quiet.

The fact that H7N9 has cropped up again near global cities is pure downside risk. The fact that it is occurring during the Northern hemisphere summer is additional risk. The fact that we only have a half year of temporal data available for this emerging disease means we don’t yet have a full picture of what risk we face as we commence the colder seasons.

Autumn is upon us and Winter is Coming.

Cases by Region (including Taiwan)

2 - CasesbyRegion_130814

There have been 135-cases reported in China, 44 of which have resulted in death. Although transported by commercial aeroplane from Jiangsu there is one case reported in Taiwan who has subsequently recovered. For the record my case numbers include the single asymptomatic cases from Beijing. The most recent onset confirmation occurred 27 July in Guangdong, the first known case from that province. The last fatality confirmation via Xinhua was reported on the 12th August.

To date 32.4% of all known cases have been fatal. For context the Case Fatality Rate of SARS was 10.9%.

The World Health Organisation confirmed that to 11 August there were 87 patient discharges (the National Health and Family Planning Commission has been doing monthly updates on the 10th of each month but the August press release is still pending). This equates to a Case Recovery Rate of 64% (with every chance for a slight improvement as there are still four patients receiving treatment). Asymptomatic cases remain at one (0.7%).

Cases by Job Title

3 - CasesbyJobTitle_130812

As a Workforce Planner I am always fascinated by how disease interacts with our employment or our daily activities. This is potentially relevant in understanding how H7N9 transfers as only one case can be scientifically linked to a person-to-person transfer, although there is strong evidence to suggest at least three family clusters.

With 42.2% of cases in the 65+ cohort the greatest job title is that of retirement. Of the 106 confirmed occupations 37-cases (34.9%) are attributed to retirees who are more likely to visit traditional bird markets and potentially are more involved in food preparation at home, both with greater associated risks. I make a small point that food preparation is traditionally more likely to be done by women and there are only seven females (just 18.9%) who are ‘retired’ in my data, thus exposure to bird markets might be a greater factor in exposure.

Farmers account for 27-cases (25.5%). Given that most Chinese agriculture is still small cropping with additional poultry (chicken, ducks, geese etc.) and other livestock the high proportion is not that surprising given that it is an avian influenza.

From there the break-downs by employment don’t offer much in terms of vector assistance, outside those such as market vendors or poultry transporters that have daily exposure to feather and fowl.

It still seems that although your employment might marginally increase your exposure to H7N9 your just as likely to catch the disease by preparing a chook for the table or living within proximity of a bird market.

Recent Health Analytics Blogs: Random Analytics: Hendra! & Random Analytics: Ebola (2013)!


Acknowledgements: Thanks first and foremost to FluTrackers and the great work you do. For good journalism on this topic I follow Helen Branswell and CIDRAP. If you are interested in getting a daily feed on H7N9 (and other related topics) then I would recommend Crawford Killian’s H5N1 site. If you like more detailed analysis of H7N9 (and other viruses) then I would point you to my fellow Queenslander Dr Ian M Mackay and his recently revamped Virology Down Under blog.

Lastly, thanks to George R.R Martin and his wonderful ‘A Song of Fire and Ice’ epic for the borrowed line (books only, I don’t do ‘A Game of Thrones’ HBO series).


Update (14/08/2013)

  • Updated the main infographic and Cases by Region after a Hebei fatality was confirmed. Some minor tweaking of article after a review of the published material confirmed a further 5 patient releases. Added Helen Branswell & CIDRAP to my acknowledgements and can’t say why I didn’t do this in the first case.

Random Analytics: Mining Workforce Planning Scan (Jul 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 category metrics the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how the industry is positioned from a workforce planning perspective.

Discussing Automation (again)

Although Augmentation/Automation only had four stories for the month of July (representing 3.9% of total inputs), the subsequent robust discussion on several forums captured the attention on many industry commentators. University of Queensland’s Centre for Social Responsibility in Mining (CSRM) set off the debate when it released its Exploring the social dimensions of autonomous and remote operation mining: Applying Social License in Design report.

I discussed the subject on LinkedIn via the MiningIQ forum. It’s a lengthy discussion but my comments in relation to employment, posted 24 July 2013 included:

As welcome as this report is, I actually believe the authors are not fully recognising the full downside risks of a fully automated mining environment. Mining currently only employs around 264,000 persons (via Skills Info and correct as at Feb 2013). A cut of 50% in an open pit environment would not necessarily be picked up on the automation side, nor through large scale production increases thus you could start forecasting a peak jobs horizon for mining employment numbers in Australia in the short to medium term.

I also believe that the 50% number of open pit reductions is probably conservative. Just thinking about an Operator Hauler FIFO 14/7 shift with 3 groups in my mind’s eye I can immediately conceive of an 80% reduction as a baseline once an automated system was implemented!

I also commented on the safety issue 27 July 2013:

Within a decade I see a case where it will start to become MORE (not less) expensive, at least from an insurance perspective, to choose to operate heavy machinery with only human inputs. Let me be very clear here. As data mining becomes more commercially aware (intrusive) insurance companies will eventually overcharge or refuse to insure those industries which fail to incorporate strict augmentation and robotic controls on industries that utilise heavy equipment including miners.

Many people see automation as an all or nothing argument. That is its robotics and automated systems over all human inputs. This is not the case. My final comments on the forum, added 31 July 2013 covered that as well:

At no time has anyone on this forum discussion or myself stated that there will be no employment in mining. There will always be a requirement for onsite operational and maintenance employee’s, just the numbers will be much lower and the KSAOC’s will need to be much higher. (FYI: Knowledge, Skills, Attributes & Other Capabilities).

Megan Edwards (Editor and Director of MiningIQ) did a good write up of the main points, including some of my comments via Cost Reduction, Automation and Change Management – a Natural Trifecta? (Note: You will need a sign-on to access the story).

Here are the analytics and analysis from July.

Workforce Planning Categories

2 - Mining_Categories_Jul2013

The following chart is an 18-month look at 14 mining related workforce planning categories and the amount of times it features as a story.

Employment was the leading category with 42-stories (41.2%), the sixth consecutive month as lead category and almost unchanged in terms of weighting from the June with 38-stories (41.3%).

For the sixth month WH&S (Work Health & Safety) was the second leading category with 14-stories (13.7%). AOD/Crime was third with eight stories (7.8%).

This is the first time AOD/Crime has finished in the top 3 as a category with data going back to January 2012. Its elevation is due to a noticeable rise in incidents plus an increased willingness for mining companies to report, whereas in the past they may have not discussed these matters publically. An example of a recent incident is an act of sabotage which occurred on a Bechtel worksite on Curtis Island, Queensland. It should also be noted that the ICAC Commission did not feature in my AOD/Crime data as it never impacted on workforce planning or employment.

I’ve also included some key time periods which underline the 18-month story. July 2012 was the commencement of the commodity crash and the first phase of job and cost cutting which saw a spike in Employment related stories (mainly negative). By December 2012 the commodity prices had stabilised somewhat but off peak pricing. At the time I thought that the mining sector had returned to Business-As-Usual (BAU) but from mid-February I’ve picked up another round of job and cost cutting impacting on Employment. This second phase is currently still ongoing and deeper in terms of time period, negative sentiment and employment impact than the first round (Jul-Oct 2012).

Positive/Negative Index

3 - Mining_PosNegIndex_Jul2013

The next chart is an 18-month look at 14 mining related workforce planning categories and their positive or negative weighting.

Employment continues its highly negative trend with a further dip in July. At -18 it’s not at its worst level on record which was -20 in September 2012 but it is close enough to warrant further investigation.

At the other end of the scale Engagement recorded a +4, the tenth time in 18-months that it has been the most positive indicator.

Mining Employment Gains & Losses

4 - Mining_Employment_Jul2013

The following table looks at the employment current reported gains and losses. Reported job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit the amount of information in relation to redundancies. Employment gains are forecast and include infrastructure phases of employment. Often employment gains are overstated as they link to public relations exercises.

July is the fourth month this year where reported employment losses were greater than 1,500. With the Queensland Resources Council stating that more than 7,000 mining jobs were lost in Queensland alone the question that I’ll be looking at later this month in a separate article will be “has mining reached its peak jobs number”.

Here’s a look at the July data.

5 - Mining_Data_Jul2013

Story of the Month

Did you know that helium is used in the production of semi-conductors and utilised for Magnetic Resonance Imaging (MRI) devices? I was not aware that the United States had a Federal Helium Reserve and that rationing of the gas has already happening. Nothing to do with workforce planning but a great article by Brent McInnes and the pick of my mining reads for July.

Final Thoughts

Last month I stated that if we had another bad set of Employment numbers in July we would be in a period similar to the commodities crash of July to October 2012.

Upon reflection I’d say that we have now exceeded the commodities crash in terms of employment friction.

Production numbers are certainly up. With more supply capacity coming on-line in coming years and some companies still locked into forward contracts (which means they are shipping commodities, namely coal at less than the total price of production) you won’t see an immediate rebound in pricing.

The risks, especially for employment are on the down side.

This is going to mean further job shedding as companies continue to tighten fiscal belts and this second phase of cost cutting looks to be ongoing, at least in the short term.

Thus more friction and workforce planning pain for both employers and employees.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (June 2013).