Townsville is at a Tipping Point of Regional Decline Unless Policy Makers Foster Significant Economic Development Opportunities

Thursday 17 January, 2019 | By: Dr Marcus Smith Categories: Employment;

Townsville needs to attract more investment both locally and abroad to support industry which will guarantee the future of the region as opposed to continuing what has been a subdued economic period for North Queensland more broadly.

Small and medium size businesses are key drivers of economic development, which make decisions including if and at what time to grow and employ people.

Thus, employment represents a key measure of business conditions in an economy – and businesses will not employ people unless business conditions are favourable.

Resource developments provide ideal conditions for small and medium businesses to grow and employ more people as they benefit from the secondary income expenditures along the supply chain and business services opportunities that are generated by these large-scale projects.  

Whilst short-term projects around stadium construction and vital infrastructure such as water pipelines provide positive media headlines, the key economic indicators around labour force participation in the region point to an urgency in arresting what has been a below par performance next to comparable centres nationally.

The Adani-Carmichael project is a much-welcome project for a city whose workforce in real terms has returned to 2007 levels; but it also needs to form part of a longer-term strategy that ensures long term economic development.

Capital works program

Public works on the Townsville stadium and the new Haughton water pipeline duplication are important short-term construction projects – but the challenge will be to sustain this employment past completion.

The Townsville City Waterfront Priority Development Area joint project is a promising initiative that business leaders should continue to promote to revitalise the Townsville CBD.

Within the private investment sector it is encouraging that Korea Zinc Company have announced plans to expand its Australian subsidiary, Sun Metals Corporation, which is expected to create about 350 construction jobs, and 100 ongoing positions in Townsville.

Arguably, the most significant project for Townsville is employment opportunities from the controversial Carmichael mine in the Galilee Basin.

As reported by the ABC, “Indian energy giant Adani has announced its Carmichael mine and rail project in central Queensland will go ahead — and will be 100 per cent self-financed.”

Federal Resources Minister Matt Canavan has said "the Carmichael project has the potential to create more than 7,000 new jobs in Queensland — a remarkable contribution to our regional and state economies."

Minerals Council of Australia CEO Tania Constable states that “the Queensland and Australian economies will benefit from thousands of new regional jobs and long-term investment in the mine and rail infrastructure.

More importantly, the mine's construction could open up the Galilee Basin to further resources development, which will drive economic development whilst observing some of the strictest environmental regulations globally.

Townsville Business Statistics

Australian Bureau of Statistics data shows the Townsville region to hold around 12,000 businesses in July 2017, of which construction made up the largest share (~20.6%), followed by Rental, Hiring and Real Estate (~11.2%), Professional, Technical and Scientific Services (~9.6%), and then Health Care and Social Assistance (~8.2%).


Conus Industry Employment Trend statistics for November estimate that largest employment division in the Townsville region in November was Health Care and Social Assistance (20%), followed by Education and Training (11.6%), Retail Trade (9.4%), Public Administration (7.9%) and Accommodation and Food Services (6.8%).



Pete Faulkner from Mission Beach-based Conus Business Consultancy Services says that given the high number of low or non-employing construction businesses he suspects that the percentage of businesses in this industry division would be much lower now than 20 per cent given recent weakness in this sector.

“Employment in Construction has fallen from over 11 per cent as recently as five years ago to under 6 per cent now, as trend residential approvals have collapsed in recent years from about 150 per month 4 years ago to about 33 now.”

“Healthcare has been the big winner, increasing from about 14 per cent in 2013 to 20 per cent today.”

“Public Administration – one of the few sectors that government can make a direct difference – has remained stuck around 8 per cent,” Mr Faulkner said.

Employment Trends

ABS employment data compiled by Mission Beach-based Economic Analyst Pete Faulkner and Conus/CBC Staff Selection estimates the total Townsville labour force (the number of employed and unemployed persons) to be about 114,200 persons – 106,700 persons employed and 7,500 unemployed.


The November estimate count was 106,732 total employed persons in Townville on a trend basis.

Over the past 12 months to November, the Townsville economy has lost about 450 jobs (~0.43% decrease) in trend terms - the fourth consecutive month of decreases in total employed.

The figures further show that despite a gain of around 200 full-time jobs (0.27%) over the 12 months to November, there has been a relatively larger decrease in part-time employment of around 650 jobs (-1.9%).


In recent years, the much-publicised closure of the Queensland Nickel refinery and subsequent loss of about 800 direct jobs has coincided with a series of redundancies at Townsville City Council as well as an organisational restructure at James Cook University.

Accordingly, it is extremely encouraging to see some recovery to total employment since July 2016; but it remains a hefty 15,850 jobs (~13%) down on its peak in April 2011 of around 122,600 persons.


The following graph shows the region’s monthly jobs growth figures and clearly highlights the tough times in the employment market, especially over the last decade.

The data shows that over the last two decades, the employment market has only managed an average monthly growth rate of 0.11% per month (about 1.3% per year) since October 1998.



While it is Townsville’s jobseekers above 25 years that have found it most difficult to obtain employment - where the median time spent searching for work in November is 34 weeks (i.e. about eight months) - Peter Faulkner notes that the Trend youth unemployment rate remains concerningly high at around 18 per cent in the 15-24 years age group.

Despite a falling trend unemployment rate (the number of unemployed persons as a proportion of the total workforce), the ABS data provides a concerning illustration of a declining workforce participation rate in Townsville.

The workforce participation statistic measures the proportion of the labour force in the economy between the age group of 16 to 64 that are employed or currently searching for work – however, unlike the unemployment rate, the participation rate considers also those unemployed workers who have given up altogether, even though they are willing to work.


Moreover, the next graph highlights how the unemployment rate has been substantially higher than in other Queensland regions for many years.


Performing an Analysis of Variance (ANOVA) shows that there is a statistically significant difference of 0.83 per cent between Townsville’s average unemployment rate (6.8%) and Queensland’s average unemployment rate (5.97%).


Further statistical analysis between various regions indicate that while there is no statistically significant difference between the average unemployment rates in Townsville and Cairns, however, there are highly significant statistical differences in the average unemployment rates between Mackay (Townsville is 1.85% higher), the Fitzroy (Townsville is 0.48% higher) and Greater Brisbane (Townsville is 1.11% higher).


The Townsville business community needs its voice heard

The statistics produced is this article reflect that the Townsville business community has faced some incredibly difficult economic circumstances over the past couple of decades.

And these statistics clearly show why the Townsville community has just cause to be frustrated that policy makers aren’t listening to their concerns.

The Suncorp Group CCIQ Pulse Survey of Business Conditions provides an opportunity for Queensland businesses to voice these concerns – and here is an example of points raised by Townsville respondents in the September 2018 survey:

(1)    “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 the position to offer apprenticeships or traineeships, so the lack of skilled workers is going to be a huge problem.  Boilermakers simply cannot be trained to be a nurse and we have seen a rapid decline in these skills set, tradesman have simply left to follow the work. Government has decreased the taxes on small business, however they have also introduced new taxes and increased land tax by 25% so it's just a 'robbing Peter to pay Paul' effect as rates and power just continue to increase.

(2)    “Currently our politicians do not represent the Australian people at large. They appear to be focusing on votes and pandering to loud minority groups. We need leadership to represent the majority; and this needs to be the case in all levels of government.  This creates a lack of confidence in the country and small business has no real say in any decisions, of course politicians talk about the importance of small business; however, they really have no respect for small business.”

Accordingly, the regional centre continues to face challenges that need serious refocus from policy makers to develop the region so that remains economically sustainable and continues to provide an attractive investment environment for business.

And at the same time, regions must also be open and proactive towards attracting new investments from both domestic sources as well as those from abroad – and that could be a story of equity also.

Whilst large resource development projects such as the Carmichael mine continue to present as vexed political issues, it is important to note that our resources, especially coal, pays not only a significant contribution toward Australia’s infrastructure as well as its burgeoning health, welfare and education sectors, but provides the nation also with relatively cheaper energy than would be the case otherwise. Read my previous article here:

More importantly, these projects foster significant economic development opportunities, which encourage small businesses to grow and employ more people.

Special thanks to Pete Faulkner and his team in Mission Beach for his experts' comments doing a fantastic job compiling the regional labour force statistics.