‘A rising tide lifts all boats’. Apparently.
The economic tide does seem to be gently rising. The unemployment rate has fallen from 4.4% to 4.1% with the workforce growing by 160,000 in 2025, whilst PWC reports that 58% of Australia’s CEO’s expect an increase in Australia’s economic growth in 2026 (up from 35%).
However, the IT jobs market in Australia was less than buoyant in 2025.
In concerning news, the Department of Industry, Science and Resources, published a dismal report on Australia’s progress towards the Government’s target of 1.2 million IT jobs by 2030 (page 33). It revealed a 3.7% decline in jobs between May 2024 and May 2025 claiming a loss of 40,000 IT jobs.
Source: DISR Annual Report 2024-2025
The report noted this was consistent with global trends, which correlates with what we’re seeing on LinkedIn. Profiles on LinkedIn for individuals working in an IT function in Australia decreased by circa 1% which was in line with decreases in both the UK and USA.
Interestingly, the number of profiles in India was flat (0.1% increase) demonstrating that this was not merely a function of offshoring.
Source: LinkedIn Talent Insight Portal
Locally, Seek IT job ads declined 0.5% across the year, however this is part of a much larger trend of tech vacancies decreasing on Seek due to their pricing model.
Seek data also points to a major slowdown in the ACT market, job ads (not just tech job ads) are down 14.7% year on year which is likely driven by public sector budget pressures and the Labor Government’s dislike of contractors and consultants.
Reality Check!!!! We don’t think it’s that bad 😊
After that depressing introduction, here is the good news: at Balance, we speak with thousands of job seekers and dozens of employers every week and we are definitively not seeing the signs of a terrible market. We are seeing many candidates with multiple offers, employers with tight budgets who are struggling to attract top talent, no significant change in ad response volumes, rarely any sense of desperation from candidates and no trend of large-scale redundancies. In fact, Balance had one of our best years ever in 2025, though anecdotally we hear many of our competitors didn’t fare as well. Trading conditions were far better for us than in ‘24 or ‘23, by a long way.
So whilst we appreciate the report from the Department of Industry, I find it inconceivable that 40,000 people left our industry…..and we didn’t notice. I’m a qualified statistician and I genuinely struggle to interpret this data. My best guess relates to overseas graduates. With changes to visa rules over recent years many overseas graduates now have limited pathways to permanent residency, few job prospects and a deadline to leave the country, so I suspect we’re seeing an exodus but one which hasn’t affected the jobs market. I would be happy to hear other interpretations.
So Why the Flat Spot?
Despite the disparity between our experiences and the data, I’m happy to agree that the market isn’t flying. And perhaps that’s a bit surprising given the near universal adoption of what may possibly be the most revolutionary tech of our lifetimes – AI.
For most businesses, there is an imperative to do more with less and there seems a subdued appetite to invest in large scale tech initiatives. As a result, we believe Australia is limping into AI.
And this is supported by PWCs latest Global CEO survey which shows just 28% of Australian CEO’s saying they have invested enough to deliver on their AI goals, and only 14% stating they’ve seen revenue gains. Hardly the type of numbers which encourages further investment.
And this correlates to what we’re seeing. Nearly every business is using AI, and most have some projects in flight. However, we’re not seeing many businesses that are ‘All-In’. In some cases, the projects are relatively expensive and fairly resource lite – so whilst we haven’t spoken to a single Australian tech worker who claims their role has been replaced by AI, I would suggest that AI is taking a bite out of IT budgets, leaving less for traditional tech and related jobs.
For core AI roles, there is a reasonable demand and an undersupply of skills: ML engineers, Data Scientists and AI Product Managers, but compared to other frenzies, this is looking pretty pedestrian, for now.
The Year Ahead
For 2026, we’re predicting another year of BAU. Yes, we will see more AI roles, but I’m guessing that local investment appetite will continue to be subdued and though there clearly will be an increase in demand for these skills, I’m not expecting a stampede.
Across most of the tech landscape we will see a repeat of 2025; project services will remain flat, whilst infrastructure, cyber, DevOps and software engineering will remain buoyant. The ACT and Federal Government sector will have a quiet year, with defence being a clear exception.
It will become far clearer over the course of the year whether the spectre of a shrinking IT sector is a blip or a trend, and I’m guessing that Australia will remain the lucky country and that increasing geopolitical threats remain a messy circus on the other side of the world rather than something that darkens our door.