Transcript The Cairns Economy - Cummings Economics

“Getting Things into Perspective”
The Cairns Economy
Recent Movements and Short-Term Prospects
1
Presentation to the
Cairns Chamber of Commerce Luncheon
November 2008
In retrospect The year 2007 / 2008
“Some negatives and
uncertainties around, but
continued solid growth.”
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The Cairns Economy | November 2008 | Cummings Economics
Tourism Growth Phases
CAIRNS AIRPORT PASSENGER MOVEMENTS
(Excluding international transits)
No.
%
1997/98
2,725,000
0.4%
1998/99
2,770,000
1.7%
1999/00
2,882,000
4.0%
2000/01
2,972,000
3.1%
2001/02
2,878,000
(-3.2%)
2002/03
3,083,000
7.1%
2003/04
3,402,000
10.3%
2004/05
3,689,000
8.4%
2005/06
3,832,000
3.4%
2006/07
3,889,000
1.4%
2007/08
3,936,000
1.2%
Asian crisis
+6%
Ansett collapse
+ 32%
High dollar
Source : Cummings Economics from Cairns Ports data.
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The Cairns Economy | November 2008 | Cummings Economics
Growth in Room Nights – Hotels/Motels
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
Source : Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
-6.0%
Overnight Visitor Expenditure
Far North Queensland
2003/04
2004/05
2005/06
2006/07
2007/08
Domestic $m International $m
$1,424
$1,020
$1,319
$1,106
$1,468
$1,110
$1,545
$1,546
$1,041
$1,030
Total $m
$2,444
$2,425
$2,578
$2,586
$2,576
Source : Cummings Economics from NVS & IVS data.
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The Cairns Economy | November 2008 | Cummings Economics
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Source: Cummings Economics from ABS Agstats.
The Cairns Economy | November 2008 | Cummings Economics
963
898
1,337
1,400
2006/07
2005/06
2004/05
795
888
2002/03
2003/04
875
788
1,000
2001/02
2000/01
682
1999/00
620
1997/98
670
594
1996/97
1998/99
609
652
1995/96
540
800
1994/95
1993/94
597
509
1991/92
1992/93
505
466
1989/90
1990/91
440
600
1988/89
1,600
376
311
1986/87
$m
1987/88
287
342
1985/86
0
290
200
1984/85
233
400
1983/84
1982/83
Agriculture
Gross Value Agricultural Production
(Long-Term Growth 1982/83 to 2006/07) $m
1,200
Gross Value of Agricultural Production
2006/07
Statistical Div
Total
(Crops)
Cairns/Far North
$1,337 m
($966 m)
Rockhampton/Fitzroy
$1,067 m
($312 m)
Mackay/Mackay
$937 m
($673 m)
Townsville/North
$740 m
($566 m)
North West
$419 m
($3 m)
Central West
$320 m
($6 m)
Northern Territory
$343 m
($99 m)
Tasmania
$963 m
($404 m)
Source : Cummings Economics from ABS Agstats.
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The Cairns Economy | November 2008 | Cummings Economics
Value of Mining Production
Far North Statistical Division
$m
700.0
$591.0 m
600.0
500.0
400.0
$349.7 m
$362.7 m
2004/05
2005/06
300.0
200.0
100.0
0.0
2006/07
Source: Cummings Economics from Q’ld Dept of Mines & Energy.
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The Cairns Economy | November 2008 | Cummings Economics
Estimated Existing Mining Workforce
Far North Queensland – Mid 2008
WORKING AT MINES
FLY-IN TO MINES OUTSIDE
REGION
Construction/Maintenance
Mines North West Q’ld
PNG & NT
TOTAL
9
1,600
1,900
500
970
460
3,500
The Cairns Economy | November 2008 | Cummings Economics
AIR SERVICES EX CAIRNS REGION TO MINES, MINING CENTRES
AND MAJOR CENTRES NTH QLD, PNG, PAPUA (INDO) & NT
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The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA
EST RESIDENT POPULATION 2007 & GROWTH 2001 to 2007
No.
300,000
253,724
250,000
214,975
214,295
204,537
200,000
163,127
150,000
100,000
45,277
50,000
44,733
34,270
29,558
17,207
5,816
25,588
24,029
22,790
1,645
0
Source: Cummings Economics from ABS data.
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Source: ABS Data.
The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA
Counts of AUSTRALIAN BUSINESSES, June 2007
No.
25,000
23,286
20,000
16,074
15,000
15,840
14,778
13,734
10,000
4,194
5,000
2,283
2,301
tl
W
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t/C
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Division
Ki
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Source: Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA - Business Numbers in
FINANCE, INSURANCE, PROPERTY & BUSINESS Services, June 2007
No.
5,535
6,000
5,000
3,804
4,000
3,759
3,312
3,453
3,000
2,000
1,000
501
417
Pilbara
Kimberley
510
0
Darwin/NT
Cairns/FNQ
Tvl/NQ
Mac/Mackay Rctn/Fitzroy Nth West/Ctl
West
Stat
Division
Source: Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA
MANUFACTURING BUSINESSES, June 2007
No.
1,200
996
1,000
729
800
660
636
582
600
400
200
135
117
111
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/N
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in
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be
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Ki
m
Pi
lb
Stat
Division
ar
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0
Source: Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA
Employment in MARINE INDUSTRIES
Usual Place of Residence, 2006 Census
No.
2,500
1,943
2,000
1,500
996
1,000
766
646
550
500
Stat 0
Division
Sta
Darwin/NT
Cairns/FNQ
Tvl/NQ
Mackay/Mackay
Rctn/Fitzroy
Source: Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
TROPICAL AUSTRALIA
Employment in ARTS & ENTERTAINMENT (Qld Gvt Definition)
Usual Place of Residence, 2006 Census
No.
1,800
1,600
1,607
1,495
1,334
1,400
1,200
1,000
800
600
400
200
0
Stat Division
Sta
Darwin/NT
Cairns/FNQ
Tvl/NQ
Source: Cummings Economics from ABS data.
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The Cairns Economy | November 2008 | Cummings Economics
0
17
1980/81
1981/82
1982/83
1983/84
1984/85
1985/86
1986/87
1987/88
1988/89
1989/90
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
Value of Building Approvals
Far North Qld Statistical Division
1200
1000
800
$M
600
400
200
Source : Cummings Economics from ABS data.
The Cairns Economy | November 2008 | Cummings Economics
Population - Growth
Growth on Previous Year - Cairns Region
2000
2002
2003
2.5%
2.4%
2.0%
1999
0.5%
0.5%
0.8%
0.9%
1.3%
1.0%
1.0%
0.9%
1.5%
1.4%
1.2%
2.0%
1.7%
1.5%
2.5%
2.0%
1.7%
3.0%
1.8%
2.9%
3.5%
2.9%
4.0%
3.3%
3.7%
Cairns Region
2.2%
Cairns
%
4.0%
(Estimated Residential)
0.0%
1997
1998
2001
2004
2005
2006
Source : Cummings Economics from ABS data..
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The Cairns Economy | November 2008 | Cummings Economics
2007
Problems “Wall St” spread to
“Main St” and rest of the world.
Cairns Region Economy already
impacted – NOT ALL BAD.
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The Cairns Economy | November 2008 | Cummings Economics
FINANCIAL CONFIDENCE
Some evidence stabilised late October.
Harder to borrow money / more scrutiny.
But interest rates down.
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The Cairns Economy | November 2008 | Cummings Economics
COLLAPSE OF WEALTH
Stock Exchange / Property Markets
discounting prospects of future earnings.
Some evidence stabilising.
Impacts on spending patterns.
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The Cairns Economy | November 2008 | Cummings Economics
FALLING DEMAND
COMMODITIES (falling prices)
AUSTRALIAN DOLLAR (devaluation)
LABOUR (less overtime, unemployment)
GOVERNMENT ACTION
FINANCIAL CONFIDENCE
PUMP PRIMING
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The Cairns Economy | November 2008 | Cummings Economics
CHANGES IN REAL GDP USA
June Qtr
Personal Consumption +1.2%
Sept Qtr
-2.8%
+3.9%
+0.7%
-3.1%
-14.1%
-6.4%
+0.6%
+2.5%
-13.3%
-1.0%
-19.1%
+12.3%
-7.3%
+5.9%
-1.9%
Federal
State/Local
+6.6%
+2.5%
+13.8%
+1.4%
Total
+2.8%
-0.3%
Durables
Non - Durables
Services
Private Investment
Non - Residential
Residential
Net Exports
Exports
Imports
Government
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The Cairns Economy | November 2008 | Cummings Economics
LOCAL ECONOMY
OUTSIDE EARNINGS
CONSUMER BEHAVIOR
INVESTMENT
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The Cairns Economy | November 2008 | Cummings Economics
TOURISM POSITIVES
FALL IN AUSTRALIAN DOLLAR
FALL IN FUEL PRICES
AIRLINE CAPACITY CONSTRAINTS PASSING
QUESTION IS
EXTENT OF DOWNTURN IN PROPENSITY
TO TRAVEL IN SOURCE MARKETS
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The Cairns Economy | November 2008 | Cummings Economics
Domestic Airline Travel - Australia
Total Airline Passenger Growth
2001/02
2002/03
(-6.6%)
+8.0%
2003/04
2004/05
2005/06
2006/07
2007/08
+11.5%
+11.4%
+6.4%
+8.0%
(July)
(August)
+7.8%
(+8.6%)
(+5.7%)
(September)
(+3.5%)
Source: Cummings Economics from BITRE – Aviation Statistics.
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The Cairns Economy | November 2008 | Cummings Economics
PROPENSITY TO TRAVEL
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US
Some reduction?
UK
Some reduction?
EUROPE
Some reduction?
JAPAN
Yen very high?
CHINA
Continue Growing?
INDIA
Continue Growing?
The Cairns Economy | November 2008 | Cummings Economics
JAPANESE FLIGHT LOSS
INCOME LOSS
$130 Million
= 5 to 6% of TOURISM EARNINGS
= 1 to 1.5% of GROSS REGIONAL
PRODUCT
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The Cairns Economy | November 2008 | Cummings Economics
AGRICULTURE
ELEMENTS COMPETING ON
WORLD MARKETS
PRICES HOLDING UP
DEVALUATION BOOST
DOHA ROUND HOPES
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The Cairns Economy | November 2008 | Cummings Economics
AGRICULTURE
FRUIT DOMESTIC MARKET –
SHELTERED MARKET
BANANA BIOSECURITY THREAT BIGGEST THREAT TO LOCAL ECONOMY
POTENTIAL LOSSES 3 TIMES
LOSS OF JAPANESE FLIGHTS
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The Cairns Economy | November 2008 | Cummings Economics
FISHING INDUSTRY
SAVED BY LOWER DOLLAR
AND FUEL COSTS
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The Cairns Economy | November 2008 | Cummings Economics
MINING
Percent Fall in Metal Prices
July 21 to November 24 in $US and $Aust
% Decline
$US
$Aust
Aluminium
Copper
Lead
-46%
-61%
-47%
-15%
-38%
-16%
Nickel
Zinc
GFMS Index
-54%
-41%
-48%
-28%
-7%
-18%
Source: US Prices – KITCO Base Metals; Exchange Rates – RBA.
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The Cairns Economy | November 2008 | Cummings Economics
Estimated Additional Mining
Jobs in Pipeline
Queensland Mackay North –
Mid 2008
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FAR NORTH
1,600
NORTH WEST
2,000
MACKAY/
CHARTERS TOWERS
3,100
TOTAL
6,700
The Cairns Economy | November 2008 | Cummings Economics
OTHER SERVICE OUTSIDE EARNINGS
MARITIME SERVICES
AVIATION SERVICES
INTERNATIONAL EDUCATION
DROP IN AUST $ RESTORES COMPETITIVENESS
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The Cairns Economy | November 2008 | Cummings Economics
CONSUMER SPENDING
CONSUMER DURABLES DOWN
$100 Million PUMP PRIMING
EARLY DECEMBER
PENSIONERS - FAMILIES
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The Cairns Economy | November 2008 | Cummings Economics
INVESTMENT
VALUE OF BUILDING APPROVALS
1st Quarter 2008/09 = $500 m
(cf – Total 2007/08 = $1.2 bn)
GOVT SPENDING NEXT FEW YEARS
Lotus Glen
$455 m
Hospital
$450 m
Dental School
$48 m
Office Block
$80 m
CLOSE TO
$1 billion
UPGRADE GOVT SERVICES, HEALTH & HOSPITAL
EXTRA EMPLOYMENT
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The Cairns Economy | November 2008 | Cummings Economics
NEW HOME OWNERS SCHEME
ABOUT $20M IN REGION
HELP HOLD UP DWELLING CONSTRUCTION
PROPERTY MARKET
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The Cairns Economy | November 2008 | Cummings Economics
GETTING THINGS INTO PERSPECTIVE
Total
Recent
Annual Growth
REGIONAL POPULATION
Res 254.000
6,000
REGIONAL WORKFORCE
130,000
3,000
Approx $10 bn
$700 m ($250m REAL)
REGIONAL GRP
Loss of 600 jobs = 0.5% of workforce.
Japanese Flights = 1% to 1.5% of GRP.
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The Cairns Economy | November 2008 | Cummings Economics
Next 12 months
Slowing in pace of growth
But still positive.
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The Cairns Economy | November 2008 | Cummings Economics
The Cairns Economy
Recent Movements and Short-Term Prospects
Presentation to the
Cairns Chamber of Commerce Luncheon
November 2008
40
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