A report released on Wednesday by the National Australia Bank (NAB) estimated that the number of jobless Australians would rise to 700,000 by the end of 2013. That means 50,000 Aussies would be added to the ranks of the unemployed.
The UK recession has seen a resulting rise in suicide rates (Reuters)
The rise in the country's unemployment rate is anticipated despite an improvement in Australia's business confidence which rose to 12 points in December to an index reading of +3.
Australia's business confidence plummeted to -9 in November 2012, the lowest level since April 2009.
However, the NAB report said that for the next six months, the economy would remain weak and growth would be slower, causing companies to further trim their spending and leading to higher unemployment.
One bright spot for the economy is the possibility of another round of interest rate cuts, forecast to fall to a record-low 2.25 per cent based on three anticipated overnight cash rate cuts in 2013.
Any rate cuts, however, would likely not avert the country's unemployment rate to rise to almost 6 per cent from the current 5.4 per cent.
"The economy is getting softer and the forward indicators are showing a sick sector with most of the positive news coming from the pick-up in global sentiment," NAB chief economist Alan Osler said in the report.
Aussies in search of jobs are advised to try their luck in Western Australia which registered a 6.7 per cent growth rate, according to another report released on Tuesday by Deloitte Access Economics.
In contrast, the national economy expanded by only 3.5 per cent. National unemployment rate is 5.4 per cent while that of WA is 4.3 per cent.
The Deloitte report said WA should expect the residential construction sector to make a major contribution to the state economy in the coming years, while WA Treasurer Troy Buswell said the report confirmed the growing contribution of WA to the Australian economy.
"Growth in WA is expected to continue on a sustainable path as the current wave of investment in mining projects transitions into production," WA Today quoted Mr Buswell.