In June, Adept Economics Director Gene Tunny presented on Queensland’s economic outlook at the Brisbane Club. Recent data both domestically and globally are consistent with his view that the economic outlook for the Queensland economy is discouraging. Last Thursday, the ABS released the July 2019 labour force data. Queensland’s unemployment rate of 6.4% (ABS Trend estimate) is significantly higher than most other states and the national average of 5.3%, and it has trended upwards since the start of the year (see chart below).
In Queensland, jobs growth has been insufficient to keep up with a growing labour force. Queensland’s employment growth rate of 2.1% through-the-year to July (in Trend terms) is below the national average growth rate of 2.7%. The same phenomena of employment growth being insufficient relative to labour force growth is becoming apparent nationally, too. The national unemployment rate has been increasing since the start of the year, from around 5% earlier this year to 5.3% in July, in Trend terms. Rising unemployment rates have been associated with increases in workforce participation rates, which possibly have been related to growth in younger age groups due to immigration, rather than to optimism about the state of the economy among people of working age. The national average workforce participation rate is at a record 66.1% and has increased from 65.7% at the start of the year, in Trend terms. Queensland’s participation rate is now at 66.0%, up from 65.6% at the start of the year.
Also released last week was Suncorp and CCIQ’s June quarter Pulse Survey report. The “Snapshot” observes:
The Suncorp-CCIQ Pulse Business Confidence Survey for the June quarter 2019 shows that business conditions in Queensland remain subdued. The sentiment across Queensland’s businesses continues to reflect soft operating conditions as well as cautious hiring and investment intentions.
Again, this raises questions about Queensland’s economic outlook. The state may well need to rely upon the resources and tourism sectors to keep conditions from deteriorating further, particularly as the global economic outlook darkens.
This article was prepared by Ben Scott, Research Assistant, and Gene Tunny, Director, of Adept Economics. Please get in touch with any questions or comments to firstname.lastname@example.org.