trends and prospects for the cairns & regional economy · trends and prospects for the cairns...
TRANSCRIPT
Ref: J3262 | 23rd July 2019
PRESENTATION TO CAIRNS CHAMBER OF COMMERCE
WS (Bill) Cummings | Cummings Economics
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
2
TIME OF 2005 PRESENTATION
CAIRNS FLYING HIGH
POPULATION GROWTH 2007/08 4%
BUILDING APPROVALS 2006/07 OVER $1BN
DWELLING APPROVALS 2006/07 OVER 3000
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
3
TROUBLE WAS BREWING
COMMODITY PRICES & INTEREST RATES UP : RISING AUST $
JAPANESE VISITOR NUMBERS : DECLINING
JUNE 2008 QANTAS : SLASHES SERVICES FROM JAPAN
LATE 2008 GFC HITS : PRIVATE INVESTMENT COLLAPSES
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
4
CAIRNS POPULATION GROWTH
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Year
19
76
/77
19
77
/78
19
78
/79
19
79
/80
19
80
/81
19
81
/82
19
82
/83
19
83
/84
19
84
/85
19
85
/86
19
86
/87
19
87
/88
19
88
/89
19
89
/90
19
90
/91
19
91
/92
19
92
/93
19
93
/94
19
94
/95
19
95
/96
19
96
/97
19
97
/98
19
98
/99
19
99
/00
20
00
/01
20
01
/02
20
02
/03
20
03
/04
20
04
/05
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
CAIRNS LOWEST DECADE OF POPULATION GROWTH SINCE 1960’S
1960’S: 12%1970’S: 23%1980’S: 46%1990’S: 33%2000’S: 28%2008-2018: 17%
Source: Cummings Economics from ABS Data.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
5
OUTSIDE EARNINGS
TOURISM
OVER $3BN
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
6
TOURISM UPSURGE NOT BEING SUSTAINED
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
200
7/8
200
8/9
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
20
18
/19
International Terminal Arrivals Domestic Terminal Arrivals
CAIRNS AIRPORT PASSENGER ARRIVALS 12-MONTH MOVING AVERAGE
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
7
TOURISM UPSURGE NOT BEING SUSTAINEDVISITOR NUMBERS GREAT BARRIER REEF BY CALENDAR YEAR : CAIRNS PLANNING AREA
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
8
TOURISM LOSS OF MARKET SHARE
0%
5%
10%
15%
20%
25%
30%
Tropical North Queensland
INTERNATIONAL HOLIDAY VISITOR NUMBERS AS % AUST. TOTAL
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Tropical North Queensland
DOMESTIC VISITOR NUMBERS AS % AUST. TOTAL
Source: Cummings Economics from Tourism Research Australia IVS & NVS.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
9
DIFFICULTIES WITH CHINESE MARKET
0
50,000
100,000
150,000
200,000
250,000
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
VISITORS TO TNQ FROM CHINA
TNQ
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2010
2011
2012
2013
2014
2015
2016
2017
2018
CHINA OUTBOUND TOURISM YEAR-ON-YEAR GROWTH
Source: Cummings Economics from Tourism Research Australia IVS. Source: Travel China Guide.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
10
TOURISM LOOKING FORWARDWEATHER EFFECT PASSED
CRYSTALBROOK : NEW PRODUCT AGGRESSIVE MARKETING
ADDITIONAL CAPACITY SINGAPORE
AUSTRALIA DOLLAR IN CHECK(US RESERVE INTEREST RATE?)
(COMMODITY PRICES?)
HOUSEHOLD INCOME METROPOLITAN AREAS
CRUISE SHIPS
MAJOR NEGATIVE : PERCEPTIONS OF STATE OF REEF
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
11
PRIMARY INDUSTRIES APPROX $2BNGROSS VALUE OF AGRICULTURAL PRODUCTION TROPICAL NORTH QUEENSLAND
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
19
82
/83
19
83
/84
19
84
/85
19
85
/86
19
86
/87
19
87
/88
19
88
/89
19
89
/90
19
90
/91
19
91
/92
19
92
/93
19
93
/94
19
94
/95
19
95
/96
19
96
/97
19
97
/98
19
98
/99
19
99
/00
20
00
/01
20
01
/02
20
02
/03
20
03
/04
20
04
/05
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
Source: Cummings Economics from ABS Data Cat. 7503.0.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
12
SUGAR PRICES
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
13
CATTLE PRICES
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
14
LARGEST FRUIT PRODUCING REGIONS
MAJOR FRUIT PRODUCING REGIONS Fruit excl. grapes
$m
Grapes
$m
Total
$m
VICTORIA'S NORTH-WEST 562.90 379.91 942.81
SOUTH AUSTRALIA'S SOUTH-EAST 511.81 388.81 900.62
QUEENSLAND'S CAIRNS REGION (1) 588.31 2.04 690.35
VICTORIA'S SHEPPARTON 562.90 9.19 572.09
NEW SOUTH WALES' MURRAY PLUS RIVERINA 274.45 289.94 564.39
QUEENSLAND'S WIDE BAY 474.94 6.34 481.28
GROSS VALUE OF FRUIT & NUT PRODUCTION $M
(1) Cairns SA4 Region plus Dimbulah area.
Source: Cummings Economics from ABS Cat. 7503.0.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
15
FISHERIESLIVE CORAL TROUT TRADE
NORTHERN ROCK LOBSTER
AQUARIUM FISH
IMPORTANT TO FIND REPLACEMENTFOR CATHAY AIRFREIGHT CAPACITY
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
16
MINING APPROX $1BN
AMRUN : CONSTRUCTION WINDING DOWN : OPERATIONAL UP
METRO BAUXITE HILL : OPERATING
CAPE FLATTERY : CONTINUING
AUCTUS MUNGANA ZINC : OPERATING
NEW SMALL GOLD MINE : FORSAYTH
CONSOLIDATED TIN MT GARNETT: CONTINUING
MT CARBINE WOLFRAM : PROSPECT
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
17
AIR SERVICES : FIFO CONTINUING
LOSS OF FREEPORT INDONESIA SHIPPING CARGOES : $170M
PNG MAJOR NEW PHASE TO DEVELOP LNG PROJECTS & WAFI GOLPU
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
18
OTHER OUTSIDE EARNINGSINTERNATIONAL EDUCATION
DOWN WITH TOURISM
NEW STUDENT ACCOMMODATION
STRONG MARKETING PUSH
AVIATION SERVICING
HAWKER PACIFIC EXPANSION
MARINE SECTOR
CAPACITY EXPANSION SHIPYARDS
EFFORTS TO TAP NEW MARKETS
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
19
INVESTMENT : VOLATILE ELEMENTBUILDING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION $M
0
200
400
600
800
1,000
1,200
1,400
19
80
/81
19
81
/82
19
82
/83
19
83
/84
19
84
/85
19
85
/86
19
86
/87
19
87
/88
19
88
/89
19
89
/90
19
90
/91
19
91
/92
19
92
/93
19
93
/94
19
94
/95
19
95
/96
19
96
/97
19
97
/98
19
98
/99
19
99
/00
20
00
/01
20
01
/02
20
02
/03
20
03
/04
20
04
/05
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
20
18
/19
Note: 2017-18 based on 11 months end May 2019. Source: Cummings Economics from ABS Cat 8731.0.
2018/19 SUPPRESSED BANKING ROYAL COMMISSION AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY CONSTRAINTS
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
20
DWELLING APPROVALSFAR NORTH QUEENSLAND STATISTICAL DIVISION
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
19
82
/83
19
83
/84
19
84
/85
19
85
/86
19
86
/87
19
87
/88
19
88
/89
19
89
/90
19
90
/91
19
91
/92
19
92
/93
19
93
/94
19
94
/95
19
95
/96
19
96
/97
19
97
/98
19
98
/99
19
99
/00
20
00
/01
20
01
/02
20
02
/03
20
03
/04
20
04
/05
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
20
18
/19
Note (1): Based on 11 months to end May 2019.
Source: Cummings Economics from ABS Cat 8731.0.
(1)
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
21
• SOME LIFT IN DEMAND FOR DWELLINGS AND COMMERCIAL PROPERTY
• ELECTIONS OUT OF THE WAY: TAX CUTS: LOWER INTEREST RATES: APRA RELAXATION (AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY)
• HOUSE FINANCE & REAL ESTATE INQUIRIES UP• RENTAL VACANCIES LOW & SOME INCREASES• VACANCIES IN COMMERCIAL SPACE MAINLY LOW GRADE, GOOD
NEW REFURBISHED PROPERTIES MOVING• LOCAL INVESTORS UNDERTAKING PROJECTS
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
22
QLD GOVERNMENT BUDGETED EXPENDITURE
Source: QLD Budget Papers.
720
643
480
330352
451412
633
0
100
200
300
400
500
600
700
800
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
CAIRNS SA4 REGION $M
UP BUT ONLY TO REGIONAL AVERAGE
STILL OWED OVER $1BNNEXT FEW YEARS : PORT DREDGING : SMITHFIELD BYPASS : CONVENTION CENTRE
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
23
COMMONWEALTH INFRASTRUCTURE ROAD INVESTMENT
CAIRNS
EXTENSION PDR
GULF
SAVANNAH HANN2018 - 19 - $0.29M $0.08M -2019 - 20 - $3.82M $1.01M -2020 - 21 - $7.00M $1.84M $5.00M2021 - 22 $20M $9.55M $2.51M $5.00M2022 - 23 $67M $31.83M $8.38M $20.00M
LATER $200M $137.50M $36.18M -
FAIR SHARE OF $100BN ON POPULATION BASIS $1.2BN : SO FAR ABOUT $700M
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
24
QUEENSLAND GOVERNMENT EMPLOYMENTCAIRNS SA4 REGION
Number(FTE)
% GROWTH ON PREVIOUS YEAR
MAR QTR 2015 11,946MAR QTR 2016 12,536 +4.9%MAR QTR 2017 12,903 +2.9%MAR QTR 2018 13,309 +3.1%DEC QTR 2018 13,387 +2.7%
Source: QLD Public Sector Workforce Quarterly Report.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
25
CONSUMPTION TAX CUTS
OF ORDER $150 – $200M
COMING THROUGH
INTEREST RATES DOWN
PROSPECTS FOR SOME LIFT
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
26
EMPLOYMENT
0
1000
2000
3000
4000
5000
6000
7000
Jun
-15
Au
g-1
5
Oct
-15
De
c-1
5
Feb
-16
Ap
r-1
6
Jun
-16
Au
g-1
6
Oct
-16
De
c-1
6
Feb
-17
Ap
r-1
7
Jun
-17
Au
g-1
7
Oct
-17
De
c-1
7
Feb
-18
Ap
r-1
8
Jun
-18
Au
g-1
8
Oct
-18
De
c-1
8
Feb
-19
Ap
r-1
9
October / November Seasonal Lows
Falling Registered Unemployed on Benefits, Cairns City
Source: Cummings Economics from Dept of Social Services - Labour Market & Related Payments Monthly Profile - Cairns Aplin St to June 2017 & Cairns North & South SA3s from July 2017.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
27
OVERALL
PAST FINANCIAL YEAR NOT AS GOOD AS EXPECTED(TOURISM, FINANCE, ELECTIONS, WEATHER & SUGAR PRICES)
PROSPECTS FOR SOME PICKUP AHEAD TO SEE GROWTH CONTINUING, BUT AT RELATIVELY SUBDUED LEVELS
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
28
CONTINUE TO LEADNORTHERN AUSTRALIA IN GROWTH
259
(-34)
445
3,027
(-190)
165
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Central QLD Mackay Region Townsville NorthernRegion
Cairns TNQ Region Northern Territory Kimberley Pilbara
Population Growth Northern Australia, Major Commercial Regions, 2017-18
Source: Cummings Economics from ABS Cat. 3218.0.
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
29
CONSOLIDATING LEAD AS LARGEST REGION IN POPULATION IN THE NORTH
Source: Cummings Economics from ABS Cat. 3218.0.
225,561
172,523
261,494
291,885
247,327
97,671
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Central QLD Mackay Region Townsville Northern Region Cairns TNQ Region Northern Territory Kimberley Pilbara
Population Northern Australia, Major Commercial Regions, 2017-18
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY
30
REGIONAL ECONOMY UNDERPERFORMING COMPARED WITH
LONG-TERM GROWTH TRAJECTORY
SERIOUS THINKING NEEDED ABOUT APPROACHES TO ACHIEVING PROGRESS
THE REGION IS CAPABLE OF
Ref: J3262 | 23rd July 2019
PRESENTATION TO CAIRNS CHAMBER OF COMMERCE
WS (Bill) Cummings | Cummings Economics
TRENDS AND PROSPECTS FOR THE CAIRNS & REGIONAL ECONOMY