The annual gross state product (GSP) data the ABS published on Friday revealed Queensland’s lacklustre economic growth of 2% in 2015-16 (compared with 2.8% nationally) was heavily influenced by the transition at the end of the mining boom. The data revealed the mining sector technically made the largest contribution of any sector to the 2% growth rate, with a 0.6 percentage point contribution associated largely with new LNG exports (see chart below). However, industries badly affected by the decline in mining construction and exploration activity, particularly construction, manufacturing and professional, scientific and technical services, all subtracted from GSP in 2015-16.
Other key points to note regarding the 2015-16 GSP data are:
- The ABS’s Queensland GSP growth estimate of 2% in 2015-16 is noticeably lower than the Queensland Treasury’s Budget time forecast of 3½%; and
- The resurgence of the public sector in 2015-16 was also a significant contributor to the GSP growth we did see (with a 0.4 percentage point contribution from public administration and safety).
On the 2015-16 GSP data, also see Pete Faulkner’s post:
ABS estimate QLD Gross State Product +2.0% in 2015/16
Pete notes Queensland Treasury may have a better understanding of Queensland’s exports than the ABS, and that the ABS may be under-estimating our GSP growth. I would suggest Queensland Treasury should publish an explanation for the discrepancy between its GSP estimates and the ABS’s.
It is a shame that we can’t isolate tourism growth from these figures. I guess it is spread across several categories. Disappointing that the second biggest contributor is the public sector. Hopefully that growth is in “productive” jobs.
Yes, tourism will show up in retail trade and accommodation and food services mainly. Tourism may have stopped the latter from recording a negative contribution associated with a reduction of work-related travel for the mining sector. Thanks for the comment, Russell.
Achieving 2% growth when the ‘bust’ part of the resources industry cycle is in full swing is actually a pretty good outcome in my view.
No need to panic and prop up short-term economic growth through public investment in dumb projects then…..
I agree, Jim. No need to panic. Thanks for the comment.
What matters most for households, business and government is the income derived from that GSP, with QLD RGSI per capita falling by 1.1% in 2015-16 . That’s not doing as well, although there seem to be signs of improvement by potentially higher inflation in the pipeline. It’s the old story, yes I can make more widgets but I pay my bills in the income that I derive from the widgets (unless Energy Australia starts to accept widgets for their electricity bills). So it’s not much use to me if I make more widgets but the prices I derive from those widgets falls by proportionally more!
Not so long ago I would have scoffed at suggestions the ABS is not measuring economic variables as well as it could. Recent experience has opened my mind. Is this the post fact world we keep hearing about?
Very good point about the income reduction, Alistair. I’m sure the ABS still believes in facts; it is just finding it much harder to produce accurate facts given it’s not as easy to get a representative sample nowadays as not everyone has a landline or a fixed address. The post fact world seems to have come about due to many people apparently not even caring about the truth. Thanks for the comment.