Queensland’s under-performing economy was illustrated by March labour force data released by the ABS today. The State’s unemployment rate appears stuck around 6%, while the national unemployment rate continues its steady decline, with the seasonally adjusted national rate falling from 5.8% in February to 5.7% in March (see chart below). In Queensland, the volatile seasonally adjusted unemployment rate rebounded to 6.1% in March from the unbelievable 5.6% in February, while the trend unemployment rate remained stable at 6.0%.
Queensland’s labour force data are difficult to read given the volatility in the underlying seasonally adjusted data, but I think they do confirm my under-performing economy view. While South-East Queensland is doing reasonably well, particularly with strong residential construction activity across the region and the Commonwealth Games’ preparations on the Gold Coast, regional Queensland is suffering profoundly from the adverse impacts of the mining downturn and drought. Combined, these opposing forces are giving us an overall lacklustre, under-performing State economy.
I chatted with Pat Hession this afternoon on Townsville ABC Radio regarding what might be done to help the struggling Townsville economy. I suggested that regional economies have to let go of unviable businesses such as the Nickel Refinery, as we cannot afford to prop up unsustainable businesses. Instead, we should improve our education systems to ensure future workers are competitive in the global economy, invest in productive infrastructure (only if it passes the cost-benefit test, of course), and have growth-promoting tax and regulatory policy settings (e.g. cutting payroll tax and deregulating retail trading hours would be a good start). My comments were consistent with a previous post of mine on regional assistance measures:
Regarding today’s jobs data, Pete Faulkner, as usual, has a good post: