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Highlights

  • In the March 2023 quarter, the unemployment rate remained low at 3.5%, depicting labour shortage.
  • Shortage of skilled and unskilled labour led to a rise in construction prices. This means there is a potential growth opportunity for human resource providers.
  • APM, whose services are spread across 10 countries, provides employment services, including several others.

As per the data shared by the Australian Bureau of Statistics on 28 April 2023, the final demand (excluding exports) stood at 124.4 for the January-March quarter of 2023. It registered 1% sequential growth, but on an annual basis, it was higher by 5.2%.

Source: Based on The Australian Bureau of Statistics Data; Analysis: Kalkine Group

*Index base period: 2011-12 = 100.0

The growth in final demand was driven by a 13.3% sequential growth in electricity and gas supply and a 1.1% QoQ rise in the output of building construction, and 3.7% growth in education and training services on the back of increases in tertiary education course fees.

Meanwhile, in the March 2023 quarter, the unemployment rate remained low at 3.5%, depicting a labour shortage. Shortage of skilled and unskilled labour led to a rise in construction prices. This means there is a potential growth opportunity for human resource providers to bridge the gap, and staffing and human resource-providing companies such as APM Human Services International Limited (ASX: APM) are likely to benefit from this.

Let’s analyse how APM is placed to benefit from the ongoing labour shortage in Australia.

APM, whose services are spread across 10 countries, provides employment services, including several others. For the half-year ended 31 December 2022, its revenue increased by 39% over pcp to AUD 853.7 million. Meanwhile, its underlying EBITDA grew by 21% annually to AUD 167.4 million.

As per an announcement by the company on 10 March 2023, it was awarded new contracts in North America, which include the Ontario Phase 2 Employment Services Transformation Programme and two new JobCorps contract in the United States. In the announcement, AMP said that the new contracts would provide an annual revenue of approximately AUD 150 million and would contribute to the organic growth of the company.

APM Share Price Performance

As of 10:45 am AEST on Tuesday, 2 May 2023, APM shares were up by 1.59% to trade at AUD 1.920 per share. In the last one month, the stock has fallen by nearly 3.52%. APM shares are nearly 46% away from their 52-week high of AUD 3.550 seen on 22 August 2022. Last month on 27 April, the stock hits its 52-week low of AUD 1.825, and as of now the stock is 5.21% higher than its 52-week low level.

AMP Daily Price Chart sourced from REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, is 2 May 2023. The reference data in this report has been partly sourced from REFINITIV.