Positive outlook for our region

THE Townsville economy is improving and there is good reason to be optimistic about the prospects for jobs, construction, property values and household spending over the next few years, according to Colin Dwyer of DS Economics.

The Townsville-based economist was commenting on the release of his latest estimates for the economy, which looks to have bottomed in 2016 with the closure of Clive Palmer’s nickel refinery and a collapse in commodity prices.

He said economic activity grew more than 1 per cent in Townsville in 2017-18 with another positive result expected for 2018-19.

“Workforce levels have improved more than 9 per cent in two years and unemployment has dropped from 11 per cent in 2016-17 to 7.6 per cent in early 2019.”

Mr Dwyer said business confidence had improved and the level of private and public major construction projects were strong.

“The State Government has committed over $760 million and the local government over $409 million in public investment to the Townsville region,” Mr Dwyer said.

“The updated DS Economics Construction database has listed over 60 projects in the wider region and the value of current, approved and anticipated major projects has surged.

“Importantly, most project listings are private sector and likely to create significant future construction and operational jobs and boost aggregate income.”

Mr Dwyer said the State Budget was positive for Townsville with $1 billion allocated to the local health workforce. Also, payroll taxes had been reduced for regional businesses.

“Add to this the recent Reserve Bank monetary policy action of a cash rate cut to 1 per cent and federal tax cuts and we expect improved disposable household incomes and borrowing conditions,” Mr Dwyer said.

He said the DS Economics Townsville residential vacancy rate was tight and when combined with flood recovery work was improving residential construction work.

He said the recent approvals for Adani’s Carmichael coal mine and Singapore defence deal had further consolidated expectations for improved conditions over the medium term.

He said the economy was benefiting from significant major projects, a tight residential vacancy rate, flood recovery work, improving workforce trends, better business confidence, improving borrowing costs, improved payroll tax and federal tax cuts.

This was being offset by high home insurance and business electricity costs.

“The Townsville economy is trending much better than two to three years ago. It has room to improve with solid potential,” Mr Dwyer said.