Robust SEQ economy distracts us from weakness in regions, particularly in Townsville

Regional_Mar16_chart1

Townsville-based economist Colin Dwyer is getting very worried about his region’s economy, noting in an email to his mailing list today that:

“Economic conditions have deteriorated in North Australia’s largest city.  The unemployment rate is the worst it’s been for 13 years…The official Townsville region unemployment rate is 12.4% up from 8.8% last month.  The number of unemployed has jumped to 13,100 the highest number since February 2003 (13.5k).”

Colin is referring to the original ABS data, which are highly volatile and unreliable, but that said I think Colin is right about Townsville’s deteriorating conditions, particularly given job losses revealed in the smoothed data preferred by Queensland Treasury (see chart above), and also given the large shock to the regional economy coming from the Nickel Refinery shutdown. As Pete Faulkner notes in his latest post (Regional jobs data is a Tale of 2 Cities in the North):

“…data shows the employment situation in Townsville as unambiguously terrible. Given that the complete fall-out from the QN debacle is yet to be seen in this data we do not expect to see this improving anytime soon.”

Using 12-month moving averages, Queensland Treasury estimates that Townsville’s unemployment rate is 8.3%, compared with a State average of 6.2% (see chart below and Treasury’s latest briefing note).

Regional_Mar16_chart2

The Townsville economy is clearly in bad shape, and other regional economies are suffering, too. I expect regional jobs will be a major topic of discussion at next Tuesday’s Jobs Growth Summit, which is being hosted by my occasional employer the School of Economics at UQ and the Australia Institute (see my post Qld Jobs Growth Summit timely, but needs to be more than a talkfest). My business Adept Economics is providing a small amount of sponsorship to the Jobs Growth Summit, and I am very much looking forward to the discussion.

Incidentally, earlier today, the Australia Institute released a paper on Queensland’s employment outlook. The paper is much more upbeat about the State economy than I would be at the present time, but it is worth a look nonetheless:

Jobs Growth in Queensland: Trends and Prospects

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3 Responses to Robust SEQ economy distracts us from weakness in regions, particularly in Townsville

  1. Glen says:

    Gene whilst there are many external factors that have contributed to Townsville current situation such as Qld Nickel, mining services businesses closing, Aurizon sacking hundreds and many more, these have all been compounded by a very vocal anti developement mentality that has crept into Townsville and indeed into the council itself. Construction in Townsville has plummeted and as an industry that employs one in ten has compounded the losses in other industries. Whilst some token house construction continues mainly due to Defence Housing projects the high density market has completely collapsed over the last few years.
    The new owner of the Townsville Casino, Chris Morris at a recent presentation was very critical of the current mindset in Townsville. As the founder of computer share and now running a vast hospitality and tourism business across Australia he is someone Townsville should be listening to.
    A restrictive council combined with a NIMBY mindset in Townsvilles premium waterfront district and CBD is a perfect example of the stagnation that has hit Townsville. A quick look on maps show 7 vacant blocks of land on the Strand a further 8 old fibro houses in disrepair. These blocks have been vacant for years and will not be built on in the foreseeable future because of restrictive planning.
    So while people call for govt departments to be moved to Townsville and other job creating projects to help get through the current downturn the people of Townsville also need to reflect on our own actions that have made a bad situation much worse, and hopefully take steps to rectify the situation.

  2. Pingback: March Employment Data | cairnseconomy

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