Download QLD State Budget 2009/10

“Understanding the challenges”
The Cairns Economy
Recent Movements & Short / Medium Term Prospects
Presentation to the
Cairns Chamber of Commerce Luncheon
Ref: J2250 | August 2009
RESIDENTIAL POPULATION GROWTH - CAIRNS
GROWTH PEAKS OVER 4000
No.
%
1985/86
4030
5.3%
1992/93
4456
4.6%
1993/94
4375
4.4%
1994/95
5077
4.9%
2004/05
4053
3.7%
2005/06
5217
4.1%
2006/07
4768
3.6%
2007/08
5599
4.1%
Cummings Economics / August 2009
NORTHERN AUSTRALIA RES POPULATION GROWTH 2007/08
6000
5000
4000
CITIES
3000
4703
2000
1000
5597
3319
2332
1719
Rock/Glad
Mackay
0
REGIONS
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
TVL
CNS
Darwin
7786
3820
4037
FITZ
Mackay
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
5290
NTH
5014
Far NTH
NT
VALUE OF BUILDING APPROVALS
FAR NORTH QLD STATISTICAL DIVISION
$M
1200
1000
800
600
400
200
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
2008/09
2006/07
2004/05
2002/03
2000/01
1998/99
1996/97
1994/95
1992/93
1990/91
1988/89
1986/87
1984/85
1982/83
1980/81
0
CONSTRUCTION BUILDING APPROVALS
FAR NORTH STATISTICAL DIVISION – DWELLINGS / HOUSES
(NUMBER)
2,000
1,500
1,000
500
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
0
CONSTRUCTION BUILDING APPROVALS
FAR NORTH STATISTICAL DIVISION – FLATS / UNITS
(NUMBER)
1200
1000
800
600
400
200
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
0
CONSTRUCTION IN THE ECONOMY
CONSTRUCTION 14% OF WORKFORCE
ALSO PART MANUFACTURING,
TRANSPORT DISTRIBUTION & BUSINESS SERVICES
INITIALLY HANGOVER OF WORK FROM 2007/08
GOVERNMENT RESPONSE – SCHOOLS
GOVERNMENT PROJECT, FIRST HOME OWNERS
Cummings Economics / August 2009
% Drop in building approvals 3 months
Mar / Apr / May 2009
on same period previous year.
Dwellings No.
Total Value
Cairns
Tablelands
-63%
-30%
-60%
Nil
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
CONSUMPTION SPENDING
LARGEST SECTOR – OVER 50% OF GDP
POSITIVES
• LOWER INTEREST RATES
• LOWER PETROL PRICES
• REDUCED INFLATION
• GOVERNMENT STIMULUS PAYMENTS $250M
• POPULATION GROWTH
ALL INDICATIONS - CONTINUED TO GROW
CONSUMER DURABLES - DOWN BUT STABILISED
Cummings Economics / August 2009
GOVERNMENT EMPLOYMENT UP
● ADMINISTRATION
● DEFENCE
● HEALTH
● EDUCATION
Cummings Economics / August 2009
GROWTH IN EMPLOYMENT
2001 – 2006 CAIRNS
No.
%
255
3%
2328
29%
596
7%
(-239)
(-3%)
425
5%
BUSINESS SERVICES
1279
15%
GOVERNMENT & DEFENCE
1073
13%
1876
23%
67
1%
562
7%
8271
100%
AGRICULTURE, MINING,
MANUFACTURING & ELECTRICITY
CONSTRUCTION
RETAIL & WHOLESALE TRADE
ACCOMMODATION & FOOD
TRANSPORT & COMMUNICATIONS
HEALTH SERVICES & EDUCATION
OTHER SERVICES
NOT STATED
TOTAL
Source: Cummings Economics ABS Data
•
Cummings Economics / August 2009
THE “BASE” INDUSTRIES
● EARN OUTSIDE INCOME
● MAINLY DEPEND NATURAL ATTRIBUTES,
RESOURCES FOR COMPETITIVE ADVANTAGE
● LOCATE ACTIVITIY IN REGION
DRIVE LONG TERM GROWTH – SHORT TERM EFFECTS
● SERVICE STRUCTURE FOLLOWS.
MAINLY IN DISTRICT TOWNS & REGIONAL CITIES
● RATIO TO GDP NATIONAL ABOUT 25%, FNQ ABOUT 50%
Cummings Economics / August 2009
TOURISM EXPENDITURE
FAR NORTH QUEENSLAND
DOMESTIC $M
INTERNATIONAL $M
TOTAL $M
2003/04
$1,424
$1,020
$2,444
2004/05
$1,319
$1,106
$2,425
2005/06
$1,468
$1,110
$2,578
2006/07
$1,545
$1,041
$2,586
2007/08
$1,546
$1,030
$2,576
Source: Cummings Economics from NVS & IVS Data
Cummings Economics / August 2009
TOURISM RESOURCES - TOURISM GROWTH
CAIRNS AIRPORT PASSENGER MOVEMENTS (Excluding international transits)
No.
%
1997/98
2,725,000
0.4%
1998/99
2,770,000
1.7%
1999/00
2,882,000
4.0%
2000/01
2,972,000
3.1%
2001/02
2,878,000
(-3.2%)
2002/03
3,083,000
7.1%
2003/04
3,402,000
10.3%
2004/05
3,689,000
8.4%
2005/06
3,832,000
3.4%
2006/07
3,889,000
1.4%
2007/08
3,846,000
(-0.8%)
2008/09
3,703,052
(-4.0%)
Source: Cummings Economics from CPA & Cairns Airports
Cummings Economics / August 2009
Asian crisis
+6%
Ansett collapse
+ 32%
High dollar
Loss of Japanese flights
TOURISM
INTERNATIONAL DOWN
● LOSS OF JAPANESE FLIGHTS
● GFC - LONGER DISTANCE
● SMALL SWINE FLU JAPAN & CHINA
● DOLLAR CREEPING BACK UP
● DREAMLINERS – NON ARRIVAL
● BACKPACKERS – LACK OF JOBS
DOMESTIC UP
Cummings Economics / August 2009
MINERAL SALES – FAR NORTH
2005/06
2006/07 2007/08
COOK
$79m
$358m
$301m $373m
$452m $465m
TOTAL
$437m
$753m
ETHERIDGE / TABLELANDS
$838m
Source: Cummings Economics from Queensland Department of Mines and Energy
ALSO - FLY IN SERVICES TO MINES ACROSS THE NORTH,
PNG & PAPUA INDONESIA
Cummings Economics / August 2009
MINERAL PRICES
Cummings Economics / August 2009
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1995/96
1994/95
1993/94
1992/93
1991/92
1990/91
1989/90
1988/89
1987/88
1986/87
1985/86
1984/85
1983/84
1982/83
GROSS VALUE AGRICULTURAL PRODUCTION
(LONG TERM GROWTH 1982/83 TO 2006/07)
$M
1400
1200
1000
800
600
400
200
0
PRIMARY INDUSTRIES
SUGAR = RECORD PRICES
CATTLE = PRICES STILL STRONG
BANANAS = THREAT PASSING
DIVERSIFICATION = CONTINUING
Cummings Economics / August 2009
MANUFACTURING LOCATIONS 2006/07
1200
1000
800
600
962
200
585
586
Rochampton
/ Fitzroy
653
506
Mackay
400
197
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
Townsville /
NQ
Cairns / FNQ
Darwin / NT
Stat
Division
Kimberly
0
MANUFACTURING
2006/07 SALES AND SERVICE
INCOME $3.28 Billion
UP 193% ON 2001/02
(INCLUDES VALUE OF PROCESSED MINERALS
AND PRIMARY PRODUCTS)
Cummings Economics / August 2009
MARITIME SECTOR
ESTIMATED VALUE AND EMPLOYMENT 2007/08
VESSEL OPERATIONS
SLIPWAYS, SHIPBUILDING,
REPAIR, MAINTENANCE
OTHER MARINE INDUSTRY SERVICES
TOTAL
Source: Cummings Economics
Cummings Economics / August 2009
VALUE
EMPLOYMENT
$M
No.
$571
$105
2970
702
$122
$798
618
4290
AVIATION SECTOR
ESTIMATED TURNOVER AND EMPLOYMENT
AIRCRAFT OPERATIONS
(REGIONAL, AIRLINES, CHARTER, OTHER)
AIRCRAFT MAINTENANCE & AVIONICS
AVIATION SUPPORT SERVICES
TOTAL
Source: Cummings Economics from Economic Associates
Cummings Economics / August 2009
$M
No.
$111
704
$42
$169
$322
229
1342
2275
INCREASE IN UNEMPLOYMENT
NUMBERS RECEIVING NEWSTART & YOUTH ALLOWANCES
Mareeba & Atherton
Cairns
Townsville
Total Northern &
Central Regions
June
2008
June
2009
%
Change
972
2681
2069
14281
1413
4719
3535
22469
+45%
+76%
+71%
+57%
Source: Cummings Economics from DEEWR Labor Market & Related Payments Monthly Profile
Cummings Economics / August 2009
OVERALL RESULT 2008/09
POPULATION GROWTH DOWN
BUT STILL POSITIVE
CITY DOWN FROM 4.1%
PROBABLY 2-3% RANGE
REGION DOWN FROM 3.1%
PROBABLY 1.5-2% RANGE
RESULT DOLLAR TERMS – LITTLE GROWTH OR DOWN
Cummings Economics / August 2009
LOOKING FORWARD 2009/10
AGRICULTURE GOOD YEAR
MINING REBOUND
TOURISM INTERNATIONAL DOWN – SLOW RECOVERY
TOURISM DOMESTIC UP
Cummings Economics / August 2009
LOOKING FORWARD 2009/10
GOVERNMENT CONTINUING GROWTH
HEALTH & EDUCATION CONTINUING GROWTH
MARITIME & AVIATION CONTINUING SOUND
CONSUMPTION SPENDING MILD GROWTH
GOVERNMENT CONSTRUCTION UP
PRIVATE CONSTRUCTION CONTINUING DOWN
Cummings Economics / August 2009
LOOKING FORWARD 2009/10
OVERALL SUBDUED PERFORMANCE
UNEMPLOYMENT PROBABLY RISE BEFORE FALLING
Cummings Economics / August 2009
POPULATION GROWTH
ON PREVIOUS YEARS – CAIRNS REGION (ESTIMATED RESIDENTIAL)
%
CAIRNS
4.5
CAIRNS REGION
4.0
3.5
3.0
3.1%
4.1%
3.3%
2.5%
2.2%
2.4%
3.7%
2.9%
1.8%
2%
1.7%
0.9%
1.3%
2000
0.5%
0.8%
1%
0.9%
1999
1.4%
1.2%
0.5
1.7%
1.5%
1.0
2%
2.9%
2.0
1.5
4%
2.5
Source: Cummings Economics from ABS Data
Cummings Economics / August 2009
2008
2007
2006
2005
2004
2003
2002
2001
1998
YEAR
1997
0.0
IMPACTS ON THE REGION
GLOBAL FINANCIAL CRISIS
DIFFERENT TO ASIAN CRISIS
TOURISM NOT AFFECTED AS STRONGLY
AGRICULTURE NOT DOWN
MINING QUICK REBOUND
GFC MORE AN IMPACT ON FINANCE
AND CONFIDENCE IN AUSTRALIA
Cummings Economics / August 2009
LOOKING FURTHER FORWARD
CHALLENGES
“
But China’s emergence also presents challenges.
If commodity prices do stay at their current relatively
high levels on the back of strong emerging world
demand, the mineral extraction sector and all those
parts of the Australian economy that service it and
feel its flow-on effects, will expand. Other sectors
will, relatively, contract over time..… These sorts of
adjustment in the economy have industrial,
geographical and social dimensions.
“
Glen Stevens, July 2009, Reserve Bank of Australia
Cummings Economics / August 2009
TOURISM
SUPPRESSING FACTORS
● NO LONGER “SUNRISE” INDUSTRY DEVELOPED ECONOMIES
● SUBDUED GROWTH DEVELOPED ECONOMIES
● HIGH CARBON FUEL PRICES
● AUST. DOLLAR HIGH / COMMODITY PRICES
● CHINA / INDIA INCOMES STILL NOT HIGH
Cummings Economics / August 2009
.
Cummings Economics / August 2009
MINING
QUICK REBOUND
IMMEDIATE HINTERLAND
MAGNETITE, GOLD, COPPER, TIN,
TUNGSTEN, DIATOMITE, PERLITE, MARBLE
INFRASTRUCTURE CHALLENGE
ROADS, RAIL, SEAPORTS
PENINSULA
BAUXITE
PNG
MAJOR LNG PLANT, OTHER MINES
Cummings Economics / August 2009
BIO INDUSTRIES
● DECLINING RAINFALL – SOUTHERN AUSTRALIA
● UNUSED WATER RESOURCES IN THE NORTH
● RISING WORLD DEMAND FOR FOOD & FIBRE
● DEMAND FOR BIOFUELS & BIOINDUSTRIAL PRODUCTS
Cummings Economics / August 2009
BIO INDUSTRIAL
IMMEDIATE
CO GENERATION FROM BAGASSE
WIND, SOLAR, OTHER GENERATION
NEXT STEP
ETHANOL FROM SUGAR SYRUP / MOLASSES
(KEY TABLELAND ROLE – INFRASTRUCTURE ISSUES)
FURTHER STEP
ETHANOL FROM BAGASSE
(KEY TABLELAND ROLE)
Cummings Economics / August 2009
BIO INDUSTRIAL
BIO REFINERIES
BIO PLASTICS
OTHER BIO INDUSTRIAL PRODUCTS
PROPOSAL TO SELL QUEENSLAND
TO GLOBAL PLAYERS AS A LOCATION
TO SUPPLY ASIA / PACIFIC
Cummings Economics / July 2009
OTHER AGRICULTURAL INDUSTRIES
● BIO ENERGY CROPS www.burmanbioenergy.com
● UPLAND RICE, TROPICAL WHEATS, COTTON
● ORGANIC BANANA EXPORTS
● 24,000 HA. REAFFORESTATION OUTPUT
● NEW SHIPPING - BULK & CONTAINER
(MINERAL PRODUCTS, AGRICULTURAL PRODUCTS, FORESTRY PRODUCTS)
Cummings Economics / August 2009
CAIRNS AS A CITY
MAIN ROLE
REGIONAL SERVICING CITY
WIDER ROLE
AUSTRALASIA, PACIFIC
CATCHUP - HEALTH & EDUCATION
SERVICE EXPORT POSSIBILITIES
Cummings Economics / August 2009
GREEN SHOOTS
WORLD ECONOMY
BUT SOME THREATS
NEXT YEAR SUBDUED
EXCELLENT MEDIUM TERM
BUT NEW THINKING NEEDED
Cummings Economics / August 2009
Cummings Economics
38 Grafton St, Cairns, 4870
Ph: 40312888 | Email: [email protected] | Fax: 40311108
Ref: J2239 | 31 July 2009
www.cummings.net.au
“Understanding the challenges”
The Cairns Economy
Presentation to the Cairns Chamber of Commerce Luncheon