Silver lining for Queensland’s economy
Deloitte Access Economics Quarterly Outlook
- Gas and coking coal exports push Queensland’s economy into positive territory
- State final demand is up 1.8%
- Household and government consumption and spend up 6.1% overall
- But no ‘feel-good’ factor in the jobs sector yet despite employment up 0.6%
2 May 2017: Queensland’s economy continues to grow up from 1.2% last quarter to 1.8% this. Deloitte Access Economics partner and quarterly outlook author, Natasha Doherty said: “Faster growth in China has boosted energy prices, raising coking coal prices as well as contributing to a spectacular lift in gas exports.
“This is buoying the state’s economy which has pushed up employment in March to 0.6% positive. And the combination of general government consumption and public fixed capital is up 3.7% overall; up from 2.4% in the previous quarter.
Energy prices – electricity, gas and other fuel - are causing household consumption to also increase 2.4% over last quarter.
“However the truth is that the economy doesn’t feel buoyant in the regions,” Doherty said.
“Although the investment in new and used housing is actually up 5.5%, pushing investment into a positive 1.1%, those businesses involved in renovation are actually down 6%.
“So it can feel like a dark cloud in various pockets in the state, particularly the regions, despite the reality of the silver lining of China’s continued growth.”
Deloitte Queensland Managing Partner John Greig said:”The silver lining is in the longer term outlook in particular. Our research puts growth at 3.5% each year on average to 2020. So the next three years will be buoyed by gas exports. In addition in our latest Deloitte State Economic Outlook, we look at Queensland’s agricultural sector.”
Rob McConnel, who leads Deloitte’s national agribusiness practice said: “Some 30,500 businesses in Queensland’s agricultural sector, contribute more than $10 billion to the State’s economy each year. Athough more rain has meant less beef production as producers look to try and rebuild their herds after the combination of drought and Cyclone Debbie. This was offset to a degree by a lift in this year’s crop for agriculture in general. As the engine room of Australia’s beef and sugar industries, and delivering a significant proportion of Australia’s cotton crop, growing global demand and bouyant commodity prices bode well for the sector’s outlook.”
Greig said: “Although the outlook for the beef, sugar and cotton industries is favourable, there is more we can do to exploit trade opportunities. We need to continue our push across the sector to meet Asia’s growing appetites, in particular the niche value-adding segments, as well as leveraging the new free trade agreement with India.
“With energy prices and exports up; strength and real opportunities in the agricultural sector; tourism growing at an average 7.4% over the next three years; hotels and resort construction will continue to grow.”
Hotel and resort construction comprises two thirds of the total commercial construction pipeline for Queensland according to the report.
Greig said: “Queensland has what the world wants. It is up to a combination of business, government and the community to ensure we step up to meet the challenge.
“In addition to the general outlook, Queensland is also attracting increased investment in developing technologies and innovations. The state is well placed to take advantage of the opportunities that would open up should Australia more generally opt to go ‘Cyber smart’.
“In terms of jobs, Deloitte research into the sector ranks Queensland a close second to NSW when it comes to benefitting from the 120,000 net new jobs expected across the national economy over the next two decades should this scenario take place.”