The new data from Queensland Treasury on non-resident – i.e. fly-in, fly-out (FIFO) or drive-in, drive-out (DIDO) – workers in the Surat Basin illustrate the boom we’re seeing in the gas-field communities out west of Toowoomba on the Darling Downs, including Chinchilla, Miles and Roma (see the Treasury report). FIFO and DIDO workers in the Surat Basin local government areas increased from 6,445 to 12,480 people in 2013 – an increase of 94% (see chart below).
The activity in the gas fields and the commencement of LNG exports later this year is one reason I’m not panicking yet about the plateauing of capital expenditure in Queensland that is now evident in the data, and the declines in other States, particularly WA, driven by falls in mining investment, and in NSW and Victoria, reflecting the parlous state of Australia’s manufacturing sector (see chart below).
Queensland is now expected to see a large drop in capital expenditure over 2014 and there will clearly be a loss of construction jobs associated with this over coming years, as projected in a construction industry report released yesterday:
Nonetheless I remain confident about Queensland’s longer-term prospects and our ability to adjust to the drop in mining-related construction, as I’ve posted on before:
That said, it’s possible the whole Australian economy could be in for a challenging year in 2014, given recent discouraging signs from the labour market suggesting a weak economy.