The good, the bad and the ugly of Queensland’s mixed economic performance
The October ABS labour force figures revealed the Queensland state unemployment rates of 6.23% in trend terms and 6.25% on a seasonally adjusted basis are the highest of any Australian state or territory and substantially above the national average.
Putting the statistics into context, these rates are marginally higher than the 5-year trend average of 6.20% and around 25 basis points above the 10-year average of 5.97%.
However, while the ABS showed Queensland’s headline unemployment rate to be the highest in Australia, this figure sheds little light on what is lurking on the jobs front within various regions of the state.
Taking a closer look at historical unemployment statistics across the State, we see that divergence in jobless figures at different times is not an isolated or remote occurrence. Rather, given that Queensland is made up of many heterogenous communities each with unique economies, it is ostensibly the norm more often than the exception.
Moreover, recent business sentiment indicators compiled in the September Suncorp/CCIQ Pulse Survey highlighted specific concerns raised by the Queensland business community regarding current business conditions as well as the division in views between geographical location that was apparent in the qualitative responses:
Quote: As a regional centre dependent on the resources sector, Mackay has seen a general turn-around from where it had been during the last 4 years. Unemployment at around 3%, rental vacancies at 2%, coking and thermal coal prices at strong dollar levels while housing approvals are up by 40%, all indicate positive opportunities for the future. – Survey Respondent, Mackay
Quote: Because Regional Queensland has struggled for the last three years, the resources and the lack of work has hampered businesses. Businesses have not been in a position to offer apprenticeships or traineeships, so the lack of skilled workers is going to be a huge problem. – Survey Respondent, Townsville
Quote: The drought is having a major impact on small communities. – Survey Respondent, South West Queensland
Quote: Regional Australia is struggling for money to be spent in their areas. We spend millions of dollars on freeways, so the city can get to work and home 5 minutes faster. Spend it on highways, dams, local schools and hospitals, so regional people are on equal level to the big cities. That will grow small business and employ people. – Survey Respondent, Rockhampton
Furthermore, I spoke more generally to the issue of multi-speed growth within Queensland’s regions in an article published in the Sunday Mail on the 11th November.
Having spent some time recently working in Regional Queensland, one case I find particularly interesting is the cyclical unemployment differentials between the Townsville region and other regional centres.
For instance, at present Mackay and the Fitzroy are benefiting economically from the resurgence in the resources sector in central Queensland, while the Townsville economy is lagging in part due to the closure of QNI which pushed these differentials to their highest peaks during 2016.
On the other hand, Cairns seems to be benefiting from improved tourism conditions driven in part by the fall in the Australian dollar, while Outback Queensland is being severely affected by drought.
While some regional centres are struggling to produce jobs, in stark contrast, others with low unemployment rates such as Mackay with 2.8% and the Gold Coast 3.8% may soon begin to show signs of overheating within their economies.
In fact, responses to the Pulse survey certainly indicate that this may already be playing out to some degree, especially given that retaining and recruiting staff was identified in the September Suncorp/CCIQ Pulse Survey as the number one business constraint facing Queensland’s business community. Moreover, some Brisbane respondents expressed concern about losing staff as the resources industry in Central Queensland continues to pick up.
Source: Suncorp/CCIQ Pulse Survey, September 2018
Queensland’s unemployment situation relative to the national story is a complex issue, especially given that unemployment rates are higher in some regional Queensland areas than they are in others.
Hence, categorically comparing socio-economic characteristics and economic statistics between SEQ and Regional Queensland can be problematic, for obvious reasons.
Ultimately, blunt, blanket public policy approaches to “regional development” are likely to be inappropriate if employment growth and economic development policies lack specificity and fail to target the key sectoral employment divisions of each region’s economy.
A special thanks to Conus/CBC Staff Selection Regional Employment Trend for their assistance in compiling the regional employment statistics.