The tide is turning in Queensland
Exports, housing construction and household consumption shift up
19 July 2016: The value of Queensland’s merchandise exports grew by $1.7 billion (3.8%) over the year to May 2016. Compared with a 4.3% decline nationally, Deloitte Access Economics expects the State to continue to beat the Australian average (4.2% decline) as LNG exports ramp up.
Exports: Deloitte Access Economics’ Mark Ingham said: “Exports are turning over quite nicely, driven largely by LNG. On the domestic front Queensland’s household construction is also up (+10.8%), as is household consumption (+< 2%), driven by clothing and footwear (+7.6%), although vehicle sales are down (-11.9%).
“Business investment on the other hand is still stagnant, pulling the overall state average into negative territory. However the level of negative state final demand of 1.8% is reducing quarter on quarter in proportion to Gross State Product.”
The June 2016 Queensland Business Outlook: Turning tide – launched by Deloitte Access Economics today – anticipates the favourable changes in interest rates and the foreign exchange will encourage business to spend a little more as they see the competitive or comparative advantage in developing a growth platform over the longer term.
Tourism: Ingham said: “Tourism cracked the $5 billion mark for first time over the year to March, riding the low dollar and encouraging our largest cohort, Chinese visitors, (<500,000), to spend $8,735 per visitor per trip.
“Add to this the fast growing Indian market – up 19.1% over the year to March – and the rich pipeline of large tourism and hotel projects worth $22.9 billion, (<50% of the commercial projects planned for the state), and expectations from tourism revenues point to a more positive forecast for the State.”
Employment: As regional development lifts, especially in Far North Queensland, the tourism numbers, along with a healthy financial sector and growing international education services are expected to begin to rebalance the current unequal employment market across the state.
The Outlook does however expect conditions to remain subdued in the large mining or resource related workforces of Mackay, Emerald, Townsville and Outback Queensland. Ingham said: “We will be watching to see if the recent State Budget and its regional action plans, even the flow of growth across the state as intended.”
Looking ahead: With Commonwealth consumption expenditure up by 7.8%, the state is looking for a ‘bang for our buck’ from the Queensland government’s $5,000 boost to the First Home Owners’ Grant that started 1 July. “We anticipate the grant will have more of an impact in S.E. Queensland, particularly in new developments in parts of Ipswich (the Ripley Valley), Logan (Yarrabilba) and the higher density areas in Brisbane as cranes are currently lighting up the sky,” Ingham said.
“Queensland’s economy is resilient. We have pushed through the strong head winds of the past, including the global financial crisis and natural disasters. Our five year Business Outlook confirms good news for our international exports, set to grow by 7.4% each year (compound annual growth). Now it is down to all of us to pull our weight as Queensland’s diversity and its strong economic fundamentals guide us towards a broader based economy,” Ingham said.
See our Queensland Business Outlook: Turning tide June 2016 analysis here.
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