A transitioning economy takes its toll – but Queensland set to outperform the rest
9 December 2015: The outlook for the Queensland economy remains solid, but there is an important split in activity. As Queensland’s big gas projects increasingly go from construction to exports, keeping overall growth in the State’s economy going, but those exports generate less of a “feel good factor” for local activity.
There’s been some pain already: Deloitte’s December Queensland Business Outlook identified that engineering construction is now just one-third of its peak size in September 2013.
Queensland-based Deloitte Access Partner Mark Ingham said: “With $4 billion in engineering construction lost since June last year, business investment needs new horizons and opportunities as more gas construction projects cross the finish line and begin production.
“Yet there are important offsets, with lower interest and exchange rates powering up parts of the State that have been on the back foot for a while.
“The benefits of lower exchange and interest rates will take two to three years to work through the economy and, as a result, our forecasts for the domestic economy stabilise in late 2016.”
In the last quarter there were some important indicators of change for Queensland with:
- The government releasing a number of policies to support knowledge-intensive activities
- The first shipment of gas from BG’s Queensland Curtis LNG facility delivered and
- The $2 billion Queens Wharf precinct in Brisbane approved.
Digital opens up new vistas
The transitioning economy is opening up new approaches for business with Digital clearly enabling and disrupting many traditional industries. Queensland already has the foundations for a strong digital economy with around 96,000 employees across the state in information and communications technology (ICT). Some 84% of Queensland households now have broadband access (just above the national average). And at least 60% of small to medium sized enterprises have some level of digital engagement.
Kevin Russo, Deloitte National Technology Advisory leader said: “Digital is both an industry and an enabler in Queensland. It is providing new sources of economic growth for the state, with a growing number of ICT jobs projected to be in demand over the next five years, tapping the growth of FinTechs, precision data analytics, our take up of smartphones and apps, and freedom of cloud tools the need for business transformation to the cloud. ”
Russo added: “The momentum of Brisbane-based NEXTDC is a good example. As one of Australia’s leading Data-Centre-as-a-Service providers, NEXTDC recently announcement the significant investment in the new data centre facility planned in Brisbane (B2). Expected to have 1MW+ of initial capacity, with a target pf 6MW, it demonstrates the growth projections in QLD in the technology sector.
“Last year it was the Australian Deloitte TechFast50 winner - the nation’s fastest growing technology company as well as one of the top five fastest growing tech companies in Asia. This example of Queensland’s digital economy is creating exciting opportunities in the market as both private and public companies are transitioning to leverage the value and freedom of cloud-based services and infrastructure.”
Purpose of Place
Mark Ingham said another opportunity for Queensland’s economic outlook is where businesses, governments, communities and individuals collaborate to create and nurture the flourishing regional and rural places that can and, in Queensland, are delivering a new economic prosperity. Brisbane West Wellcamp Airport which celebrated its first birthday and its inaugural international freight flight of fresh produce direct to China, the world’s biggest consumer market, is a good example.
Ingham said: “Wellcamp Airport is set to become a major international air freight hub for the region. It supports one of Australia’s best agricultural regions, with annual production of more than $660 million. This is an exciting demonstration of business, government and community collaboration.”
Ingham concluded: “Because Queensland has the nation’s most regionalised population, its regional cities and remote areas need greater consideration for policy. To date Australia’s regional cities have ranked highly on measures of health and safety, the downsides have been the lack of connectivity with metropolitan areas and export markets, and often a limited supply of jobs, particularly for the younger workforce.
“Given that Australia’s rural and remote areas are rich in natural resources and have particularly strong communities, we believe that when people, communities, technology, and governments act together, these dynamic forces can unlock the potential of place and spark a virtuous circle of prosperity.
“For all these reasons Deloitte Access Economics expects both the domestic and exporting components of the Queensland economy to return to pre-boom growth trends within the next year.”
 Deloitte Access Economics estimates that Queensland will add almost 10,000 new ICT jobs by 2020. It also founds, however, that on current trends, universities are unlikely to graduate enough ICT students to meet these future needs.
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