The big news for the Queensland economy today is the Federal Government’s approval, subject to meeting environmental conditions, of Adani’s massive Carmichael Coal and Rail Project. There are, however, doubts about whether the project remains economically viable given the downturn in coal prices (Adani coal mine approved amid weaker prices). Let’s hope the project still stacks up, because regional Queensland outside of SEQ has faced challenging economic conditions recently, partly due to the slowdown in the mining sector.
The challenging conditions in regional Queensland were clearly evident in the regional employment data released by the ABS the week before last. Smoothed, trend estimates of the data by the Queensland Government Statistician’s Office showed that, broadly speaking, all the jobs growth in Queensland in the 12 months to June 2014 occurred in SEQ (see the June 2014 information brief). Employment declined in regional Queensland by 2,000 employed persons over that period, compared with growth of 42,600 employed persons in SEQ. (N.B. I’ve defined SEQ as Greater Brisbane, Gold Coast and Sunshine Coast.)
The Government Statistician’s Office’s estimates rely on a 12-month moving average, which is a pretty basic smoothing technique and arguably could be improved upon. One effort to produce better trend estimates of regional employment data has been made by Pete Faulkner of Conus Consulting. Pete’s trend estimates (available at this link) are a by-product of an advanced seasonal adjustment routine. Based on Pete’s trend estimates, non-SEQ Queensland is no longer subtracting jobs from the Queensland economy, but jobs growth is much weaker than in SEQ (see the chart below).
I have some doubts about whether the ABS regional employment data are suitable for the seasonal adjustment procedure that Pete applies, given the huge degree of noise in the data, so I’ll withhold judgment for now on whether the Conus or Government Statistician’s trend estimates are more useful. However, I will applaud Pete for making the effort to better understand what is occurring in our regional economies. The ABS’s noisy, regional employment data cause a lot of confusion about the state of our regional economies, as a recent Townsville Bulletin article demonstrates: