Major projects hopefully address NQ unemployment

Tuesday 3 January, 2017

Unemployment is falling across Queensland, with the exception of Townsville.

North Queensland is swimming against the tide at the moment with rising unemployment, which is now at a record high of 11.0 per cent.

It is obviously hoped that some of recent announcements including the City Deal, Carmichael coal mine and new stadium project will begin to produce economic activity, encourage further investment and drive down the unemployment figure in the region.

But there is evidence to suggest that rather than being 11.0 per cent, the real figure is probably double that, once you take into account the “hidden” unemployed. This means the challenges for Townsville are real – and critical.

The most recent release of regional labour force data from the Australian Bureau of Statistics (ABS) has revealed some encouraging signs in relation to jobs and unemployment, especially in those areas that have experienced significant strain in recent times.

Across the past 12 months, falls in the level of unemployment have been recorded across a number of areas in Queensland including Logan, Mackay, Fitzroy, the Sunshine Coast and Wide Bay.

While some of these regions continue to have levels of unemployment that are unacceptably high, which are presenting significant challenges for these communities, it is still positive that there is a clear downward trend leading into 2017 across much of Queensland.

Townsville is an exception to what is being seen across much of Queensland, and recorded an unemployment rate of 11.0 per cent in November 2016, which is the highest level since the ABS began publishing regional labour force data in 1999.

Significantly, this places unemployment in the region at 3.0 percent higher than what was recorded in November 2015, and 5.0 per cent higher than the current Queensland average of 6.0 per cent (seasonally adjusted).

ue graphic

Source: ABS

As is the case across much of Queensland, the rise in unemployment has coincided with a sharp fall in the participation rate, which records the proportion of the working aged population that is engaged in the labour force.

While displaying some variability across the past decade, the participation rate in Townsville has been consistently higher than the Queensland average for much of the past 10 years, with the mining investment driving employment opportunities in the region.

participation graphicSource: ABS

Since a recent peak of 67.3 per cent in May 2015 however, labour force participation in Townsville has collapsed, and is currently at 59.0 per cent, which is the lowest level on record.

Compared to May 2015, there are now 14,200 fewer people employed in Townsville, but only a fraction of this decline in employment is captured by an increase in the number of people that are unemployed.

Across the past 18 months, the number of unemployed people has increased by 1100 people, while approximately 13,100 have disengaged from the labour market entirely, becoming part of the hidden unemployed.

Analysis conducted by CCIQ has revealed that the falling participation rate can be partially explained through demographic shifts in the working aged population, with an increased proportion of people aged over 55 impacting overall participation.

After controlling for this effect however, a significant amount of the decline since May 2015 is still left unexplained, and much if this believed to be associated with an increase in the number of discouraged job seekers that have stopped looking for work.

As a result, it is likely that the real unemployment rate in Townsville is well above the official figure of 11.0 per cent that was recorded in November 2016, with CCIQ estimate that it would be 21.9 per cent, had participation remain unchanged since its recent peak in May 2015.

ue adjusted graphicSource: ABS; CCIQ

This highlights the challenge that is currently before the people of Townsville in addressing the significant decline in employment opportunities available in the region, and its associated impact on communities across North Queensland.

The size of the task confronting Townsville, and other parts of Queensland, suggest that the major issues to be addressed in 2017 exist outside the south east corner and reinforces the need for a serious focus on regional priorities in the New Year.

Recent announcements regarding the City Deal, Carmichael coal mine and construction of a new CBD stadium and entertainment precinct all suggest that economic activity and investment could return to North Queensland across the next 12 months and beyond, providing a much needed boost to the region.

Only through the implementation of a sustainable, long-term economic plan for the region will there be a meaningful return in the level of business confidence that will deliver increased growth, and job creation for North Queensland.

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