The Economic News Thread

[AG]

SA economy surges ahead of nation
Article from: The Advertiser
NIGEL AUSTIN
June 30, 2009 12:01am

SOUTH Australia's economy is forecast to outpace the nation's, which is the healthiest in the developed world, in the next two years.

A broad range of optimistic reasons behind the growth have been outlined by Department of Trade and Economic Development (DTED) chief executive Brian Cunningham, at a breakfast held by the Engineering Employers Association SA, which will become the Australian Industry Group SA from tomorrow.

Mr Cunningham said SA was performing well in retail spending, business confidence, exports, population growth, labour market, the housing market, business investment and state final demand data.

Positive views about the state's future had also been expressed recently by many independent observers, including Access Economics and ratings agencies Standard and Poor's and Moody's.

"In short, South Australia's economy is forecast to continue growing faster than the national economy for the next two years," he said.

Mr Cunningham said SA had been performing better in each of the three key components of growth in recent times. These included a population growing faster than predicted and on track to reach two million by 2027, instead of by 2050, as envisaged in the state strategic plan.

The state also had record levels of labour-force participation and the attributes that lead to higher productivity – skills, education and training, innovation and creative people working in sectors vital to growth.

Mr Cunningham said a particularly positive aspect of the economy was private investment, an important driver of jobs and growth, in the March quarter.

The private investment included 26 projects, each involving more than $100 million, which are either approved or under way in SA.

Most, if not all, projects were tracking well with the list including several significant new windfarms in recent months, he said.

"And that doesn't take into account an additional $20 billion of public sector projects we know will happen," he said.

"At DTED we make an effort to contact all private project proponents directly and regularly to gauge progress.

"The news is overwhelmingly `all-go'," he said, but cautioned that the state would be affected by the global economic downturn.

Key challenges included expanding the economy and moving the economic base to higher value-add sectors.

Mr Cunningham said the department was also reviewing the SA Industry Participation Policy, which sets out the Government's preferences for engaging local industry.

"Its intent had been to give local industry full, fair and reasonable opportunity to be considered for major works being undertaken in SA," he said.

The current policy was "probably not" working well enough and the Economic Development Board had recommended a review.

[adam_stuckey]

I am pretty sure SA will bounce back pretty quickly, the shift away from relying on the manufacturing sector has helped with our dependancy on consumer confidence.

I hope so! I do like how we're getting into Green energy that market is ripe for the picking and South Australia has every need covered in that aspect (Waves, wind and sun) all we need is investment!

By the way has anyone seen the solar towers the company Enviromission are try to get off the ground? I know its in NSW but this would be perfect for ouback South Australia!

http://www.enviromission.com.au/EVM/content/home.html

[Norman]

Australia's unemployent rate increased by another 0.1% (to 5.8%) in June, but SA again defied the other states and remained steady on the unemployment rate (5.4%).

[AtD]

SA's unemployment rate is now on par with Queensland's.

[skyliner]

But QLD has turned into a basket case - not saying SA is. It is where the states have travelled since the GFC relative to where they were economically. QLD is $14bn deficit and selling off 6 major assets - such as Brisbane port, the coal railways etc etc. Power, water and petrol up. Caught half way through transport infrastructure construction. Everyone is happy - not!QLD will see much more unemployment once the coal industry is hit by the climate change policies of Rudd. Don't go there to live ATM.

SA - STATE ON THE MOVE

[UrbanSG]

From adelaidenow:

SA's growth tops nation
CHRISTOPHER RUSSELL, MARK KENNY
September 03, 2009 12:01am

SOUTH Australia has soared ahead of the other states in economic growth, a key indicator published yesterday shows.

Household, business and government spending all defied the downturn and recorded strong growth in the past financial year, the Australian Bureau of Statistics found.

While other states were hit hard, SA has been opening new mines, such as the Angas zinc mine at Strathalbyn, and creating a robust economy, with 1.3 per cent growth in the quarter and 5.2 per cent over the year.

"This is actually a pretty good result," Prescott Securities chief economist Darryl Gobbett said.

The state result contributed to Australia recording national growth in gross domestic product of 0.6 per cent in the quarter – blowing away fears of a recession.

Federal Treasurer Wayne Swan called the GDP result "remarkable".

"Today's national accounts show that the Australian economy has been the best-performing advanced economy over the past year and the only advanced economy that has recorded positive growth over this period," he said.

State figures in the GDP data show a seasonally adjusted annual increase of 5.2 per cent in SA, compared with a 2.5 per cent increase in WA, 1.5 per cent in Victoria and 0.8 per cent in NSW. Queensland went backwards at negative 2.5 per cent.

The indicator measures what was spent by households, business and government, on both consumption and capital investment.

"SA has come through this downturn pretty well," Mr Gobbett said.

He noted the growth was widespread, with household and government spending "a bit stronger than we've seen nationally".

"The other thing is what's happening in the housing sector – construction is doing quite nicely. And business investment has held up."

Mr Gobbett said in the next two years the air warfare destroyer project, the expansion of Olympic Dam and potentially a good grain crop would lift SA further.

"We could well see good growth off what's proved to be a firm base, given all the problems there have been," he said.

In contrast with WA and Queensland – which slumped when the resources sector came under pressure – SA opened new mines last financial year, including the $1.2 billion Prominent Hill copper mine and Terramin Australia's Angas zinc mine. In its first year, Angas has injected more than $1.5 million into local business and exceeded production targets.

"Everyone down at the mine feels extremely proud of this effort," Angas general manager Andrew Robertson said.

The ABS said South Australians spent $19.5 billion in the quarter. Of this, $11.5 billion was spent by households on consumption and $3.5 billion by government.

When it came to capital investment, the private sector spent $3.8 billion and government $629 million.

Treasurer Kevin Foley was pleased by the good performance of key sectors, particularly business investment and household consumption.

"That demonstrates South Australians have greater confidence in the way the state is being managed and is headed in the future," he said.

"However, there are fluctuations in other sectors and while the overall picture is positive, the impact of the global financial crisis continues to provide areas for concern which I will continue to monitor closely."

Business SA chief executive officer Peter Vaughan said while challenges remain, the figures "point to a cautious recovery" and show the SA economy is resilient.

[Wayno]

just outside the CBD, I spotted at least 15 commerical buildings along Greenhill road that are vacant / for lease (spanning Unley Rd to Anzac Hwy). Is that a sign of a wider issue - i thought SA was doing reasonably well, economically speaking...

[Brando]

just outside the CBD, I spotted at least 15 commerical buildings along Greenhill road that are vacant / for lease (spanning Unley Rd to Anzac Hwy). Is that a sign of a wider issue - i thought SA was doing reasonably well, economically speaking...

From what i heard mate, the CBD has pulled in a lot of the office space from the fringe locations.

[Wayno]

just outside the CBD, I spotted at least 15 commerical buildings along Greenhill road that are vacant / for lease (spanning Unley Rd to Anzac Hwy). Is that a sign of a wider issue - i thought SA was doing reasonably well, economically speaking...

From what i heard mate, the CBD has pulled in a lot of the office space from the fringe locations.

yeah, that was my first thought too. Not sure if that trend is being driven by cheaper CBD office space? or staff preferring to catch PT to work, or, or...

[skyliner]

Australia's unemployent rate increased by another 0.1% (to 5.8%) in June, but SA again defied the other states and remained steady on the unemployment rate (5.4%).

What is the unemployment rate now - QLD is 6.3 - just hiked up significantly in the last month.

SA - STATE ON THE MOVE (as evidenced by reports on this thread)

[AG]

Australia's unemployent rate increased by another 0.1% (to 5.8%) in June, but SA again defied the other states and remained steady on the unemployment rate (5.4%).

What is the unemployment rate now - QLD is 6.3 - just hiked up significantly in the last month.

The national unemployment rate is currently at 5.7%, down from 5.8% in August.

[AtD]

What is the unemployment rate now - QLD is 6.3 - just hiked up significantly in the last month.

QLD now has the wooden spoon for unemployment rates. SA is dead on the national average.

[SRW]

SA is dead on the national average.

I once wonder if we'd ever see that. It's fantastic news.

[joshzxzx]

Hey guys.. Have a read of the attached document...

Very very interesting reading about economic conditions in Australia and especially SA

http://rapidshare.com/files/294859089/N ... 9.pdf.html

[Howie]

http://www.architectureanddesign.com.au ... 03077.aspx

Australian cities ranked on property success
22 October 2009 | by Gemma Battenbough
Adelaide and Melbourne have the second tightest CBD office markets in Asia Pacific, with vacancy rates lower than Sydney, Perth and Melbourne, according to new research by Colliers International.

The cities, each with a vacancy rate of 4.8 per cent, sit behind Seoul on the international scale which has a 3.1 per cent vacancy rate.

The cities have the 12th lowest vacancy rates in the world, according to the Colliers International Biannual Global Office Review for mid-year 2009, which covers 172 cities around the world.

Sydney was sixth on the Asia Pacific list with a vacancy rate of 7.7 per cent and Perth, which has fallen from its global perch at number one for the past 18 months, ranked seventh after climbing steeply from 0.3 per cent 12 months ago to now sit at 8 per cent.

Internationally, the top five office markets for lowest vacancy rate were Rio de Janeiro Brazil (at 0.6 per cent), Regina SK Canada (1.6 per cent), Victoria BC Canada (1.9 per cent), Tirana Albania and Geneva Switzerland (at 2 per cent each) and Lima Peru (2.7 per cent). Sydney, Perth and Brisbane (at 10.7 per cent) ranked 45th, 49th and 71st respectively.

Felice Spark, Colliers International director of commercial, said all regions of the world continue to experience below trend growth and, as a result, demand for office space has been sub-par relative to the recent past.

“A year ago, only major financial centres were reporting sluggish leasing activity; however since then weakness has spread to all continents and almost all countries and Australia has been no exception,” she said.

“In the Asia Pacific region weak results were posted during the first half of the year with the regional vacancy rate increasing by 278 basis points to register 11.4 per cent.

“This increase comes on top of a rise in vacancy recorded in the latter half of 2008 and brings the region’s vacancy rate up to levels experienced in 2005.”

Simon Hunt, Colliers International managing director of office leasing, said Asia Pacific posted slightly weaker results during the first half of the year with the regional vacancy rate increasing by 278 basis points to register 11.4 per cent.

“This increase comes on top of a rise in vacancy recorded in latter half of 2008 and brings the region’s vacancy rate back to levels recorded in 2005,” he said.

“Compared to regional world markets Australian CBD office markets are recovering well, with an average vacancy rate of 7.3 per cent, and this figure is expected to contract mid to late next year with limited new development to come online during that time due to restricted financing.”

Of the top 50 cities ranked by construction costs only Perth and Melbourne qualified, at 36th spot with 2.6 million square feet of new space underway, compared with Moscow at number one with 40.9 million square feet.