Deloitte flags QLD jobless risks
QUEENSLAND needs to maintain infrastructure spending to combat wobbly wage growth and falling housing construction, according to Deloitte Access Economics.
Deloitte in its quarterly business outlook released today said Queensland jobs growth had strengthened over the first four months of the financial year, but more needed to be done to get unemployment down further and boost growth.
Deloitte Access Economics leader Dr Pradeep Philip said Queensland's diverse economy had helped it to clip peaks and troughs but even that had not helped performance recently. "Housing construction activity has slid partly in response to the earlier glut of apartment building," Dr Philip said. "Business investment also has slid, much of which is still due to completed work on big LNG projects.
"Wobbly wage growth plus falling housing construction hurts state GST monies so it is good the state is keeping up its infrastructure spending. Delivery is key."
He said Queensland needed to trade on its positives including more affordable housing, growing population, and a diversifying economy to manage a more challenging global environment. "Our business cycles tend to be bigger than most states because of exposure to global commodities, seasonal weather and climate change," he said, adding metallurgical and spot thermal coal prices were under pressure.
Dr Philip said the impact of drought and bushfires would be detailed in the budget due to be tabled in State Parliament in April. Economic growth in Queensland is 2.5 per cent for 2019/20 down from the 3 per cent originally forecast.
"Natural disasters and trend shifts in climate change already have, and will likely continue to have, long term impacts on the budget bottom line," he said.
"The Queensland budget remains in surplus - wafer thin - but more needs to be done to keep expenditure under control. Ongoing drought conditions have weakened the agricultural export outlook since the last budget."
He added Queensland's unemployment rate remained stubbornly higher than it should be, but with more people entering the jobs market the improvement in the participation rate was expected to pay dividends in coming years.