Queensland economy improving in many more ways than one
There seems to be a tendency for debate to focus on the negatives about Queensland’s economic performance, making it easy to find reasons to not be optimistic. In reality, this shouldn’t be the case, as Qld’s economy is quietly on course to become the best-performing in the nation. The Chamber of Commerce stated recently “Data released across the past month has provided further indication that momentum is continuing to build in the Queensland economy” and Deloitte is expecting Qld will record the strongest economic growth in the nation to 2025-26.
Qld provides a multitude of opportunities with soaring tourism numbers, booming agricultural exports and resurgent coal prices, combined with an ongoing construction boom in the southeast corner. See the outline below of the how well each of the different market sectors are performing in Qld.
Property & Construction
Sydney house prices are now 75% above those in Brisbane. Not only does Brisbane offer greater affordability for first home buyers, investors can benefit from the superior 4.1% rental yield in comparison to 2.8% that Sydney and Melbourne offer.
There have also been an outstanding 50,000 dwelling approvals over the past 12 months and activity in the non-residential building sector has also been increasing. Including commercial, industrial and education sectors which includes the Commonwealth Games construction projects.
Infrastructure
Infrastructure investment in Qld has resulted in an improved level of confidence in the economy with Brisbane now being referred to as a ‘New World City’. The Qld government has enabled a $10.7 billion infrastructure spend in 2016-17, to improve transport links and promote property development, including Brisbane’s Cross River Rail project and Townsville stadium.
Tourism
Tourism has always been synonymous with Qld, due to the perfect tropical weather, being home to some of the most beautiful beaches in the world and many more attractions. With the industry also benefiting from the lower Australian dollar, Qld had the strongest share of international visitors at 69.2% with visitors also spending a record $5.1billion.
Not only is it the international visitors that are holidaying in the Sunshine State, domestic overnight visitors to Qld reached 20.2 million to the year ending June 2016 which is the highest rate since 1999.
Resources & Commodities
The RBA claims that “more than three-quarters of the anticipated decline in mining investment is behind us” which implies that mining investment may stabilise over the next 12 months. Coal prices have now recovered with Qld’s oldest coal mine in Collinsville announcing that it will restart production, employing up to 200 workers. Combined with the construction on Carmichael Coal and Rail project and signs of growth in base metals, this is fantastic news for regional communities and for the broader state.
The Carmichael Coal mine is expected to create 10,000 direct and indirect jobs in total and is predicted to be Australia’s largest coal mine once fully operational. The government has also stated that their commitment to the reef would be strong with a $100 million injection to the reef and the promise of no dumping of capital dredge spoil to the reef and high water quality targets.
Agriculture
There is a rising global demand for beef, particularly from Chinese buyers and a more competitive Australian dollar is further demand. Cattle prices are performing well and are sitting just below record highs that were recorded in August. Implementation of free trade agreements will boost growth even further.
Sugar remains one of the best performing commodities due to supply concerns and chickpea prices are also at record highs.
Consumer Sentiment & Business Confidence
Business confidence in the state is on the rise and Deloitte is forecasting economic growth to surpass the national average in the next three years. The Westpac-Melbourne Institute of Consumer Sentiment Index for October reports that consumer sentiment in Qld is above the national average and has risen sharply over the past 12 months. This is reflected in retail sales, where the state growth of 3.1% over the year is outpacing the national rate of 2.7%, with retailers confident that consumers are ready to spend big this Christmas also. Rural and non-rural commodity prices have lifted since earlier this year, allowing the country’s “Terms of Trade” to increase for the first time in more than two years.
Queenslanders and many others believe that it’s time for the business community to get behind Qld and start spreading the optimism of this growing state!
Source: Opinion: Queensland economy picking up pace, Steve Johnston, The Courier-Mail and Australian Banking and Finance Forum
Source: Queensland economy on course to become nation’s strongest, Daryl Passmore, The Courier-Mail
Source: Adani’s $22-billion Carmichael coal mine to be headquartered in Townsville, Chris O’Brien and Leonie Mellor, ABC News
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