NAB Chief Economist Alan Oster had a memorable quote regarding the latest NAB Business Survey results published in The Australian yesterday:
“West Australia is going backwards, South Australia is in no great shakes and Northern Queensland is just as bad, but the eastern seaboard, from southeast Queensland through NSW and Victoria, are shooting the lights out.”
Oster has correctly identified the divergence in economic performance between SEQ and regional Queensland. This divergence means it is difficult to characterise how the total Queensland economy is performing. The ongoing economic weakness in regional Queensland has contributed to the Queensland unemployment rate increasing slightly to 6.5 percent in June, up from 6.4 percent in May (see chart below and Queensland Treasury’s Labour force brief). This is much higher than pre-financial crisis lows, but is much lower than historical double-digit highs, last seen in the early 1990s when the unemployment rate reached 10-11 percent. That said, the Queensland outback had a double-digit unemployment rate in May of nearly 12 percent and Townsville had an unemployment rate over 9 percent, according to Queensland Treasury’s smoothed estimates of the ABS original data (see Treasury’s Regional Labour Force brief).
While SEQ appears to be performing reasonably well, it is obvious that jobs growth in SEQ is being offset to a large extent by job losses in regional Queensland, producing a relatively low rate of employment growth of only 0.3 percent over the year to June, compared with 1.9 percent nationally (see chart below).
As I have commented previously, Queensland’s under-performing economy may have discouraged many people from looking for work, resulting in a reduction in the labour force participation rate (see chart below). Indeed, our participation rate has converged to the national rate (now 64.9 percent), while historically Queensland had a significantly higher participation rate.
On the June labour force data released by the ABS today, also see Pete Faulkner’s post:
Queensland Economy Watch 
Gene in regards to the participation rate, evidence from the ground would indicate a growing number of people up my way who after many years of good wages have simply decided they can afford not to work. Some who have worked 10 – 20 years on good money in mining, mine services, minerals processing and support industries have managed to eliminate most debt and at the same time secure large super balances that will continue to grow. Very low interest rates will also allow many to redraw on current credit facilities to maintain a standard of living for quite a period of time until either a good paying job comes along or for some in the fifties until they can access their super. Cities like Townsville may well drift towards the type of numbers we see out of Wide Bay who have a large retirement population which would require a totally different workforce than the one we have today.
We just finished supplying products to quite a few new nursing home/ retirement villages under construction in Townsville, management from completed projects advise they are bringing up staff from down south to operate and run them as the skills just aren’t available in Townsville at the moment despite double digit unemployment, clearly this is an indication that training is not being provided for the types of jobs that are required into the future.
Very interesting info, thanks Glen.