EOFY economic snapshot: How Brisbane and Queensland fared in 2016-17
Over the 2016-17 financial year Queensland has returned positive growth to the domestic economy. John Greig, Managing Partner Deloitte Queensland, writing for The Brisbane Report outlines how Deloitte is forecasting this growth in the capital and the state will continue over the next couple of years at a higher annual rate than the national average, driven by better than expected export prices and demand from China.
The continued demand from China is boosting energy prices, which along with raised coking coal prices and spectacular gas exports means we anticipate growth over the long term will average 3.5% each year to 2020.
The most recent Deloitte Access Economics outlook put the state’s final demand up 1.8% boosting employment by 0.6%, which along with general government consumption and its returns from fixed capital, lifted economic growth to a positive 3.7% overall for the quarter.
In addition, investment in new and used housing went up 5.5%.
Greater Brisbane is contributing to Queensland’s Gross State Product benefit, with the good economic returns coming from attaining scale in knowledge-intensive services and high-value manufacturing.
Source: Deloitte Access Economics’ Queensland’s Business Outlook silver lining - March 2017.
Tourism booms (and there’s more to come)
Tourism, one of the pillars of Queensland’s attractiveness, is growing really strongly. It represents a $23 billion industry, contributing a total 7.5% of GSP and supporting one in 11 Queensland jobs (220,000 jobs in total). And Brisbane had a record-breaking year in the sector.
It is the third largest export industry (behind coal and food), at 14% of Queensland exports.
During the past 10 years Queensland has increasingly relied on international tourism generally and on the Asian international market specifically.
By 2016, international visitor nights to Queensland had grown from 34 million nights in 2005, to 52 million nights, while interstate visits only grew modestly from 31 million to 36 million nights over the same period.
Chinese tourists were the greatest drivers of international visitor nights, increasing from 1.2 million in 2005, to more than 6.7 million in 2016. The length of stay also almost doubled from an average 12 nights per trip in 2005 to 22 nights in 2016.
Greater Brisbane is now determined to attract a greater slice of this touristic pie, which is feasible given the rapid rise in the Chinese millennial submarket.
Today, half of China’s outbound travellers are millennials. They spend 27% of their income on travel and take four trips outside the country a year – twice as many as their peers from the rest of Asia.
This is good news for both the leisure and retail sector in Brisbane, as well as Queensland’s international education and training sector, which received a $6 million boost to take advantage of such opportunities last year.
Technology, tourism and construction
Areas of focus that underpin the greater confidence in Queensland include technology changes, building construction starts, and the continued beacon of tourism. These are all economic growth areas.
Examples of construction for Greater Brisbane include the new parallel runway at Brisbane Airport, which progressed well during 2016-17, with the associated business park beginning to gain occupants. The Star Entertainment Centre on Queen’s Wharf has shifted from concept to reality, and is set to change the face of Brisbane’s CBD after construction commenced in January.
Greater Springfield, on the outskirts of Brisbane’s south-west, is attracting businesses as well as residents, building a community where people can afford to live, secure work, be educated and have their health needs met.
In addition to Springfield, new master-planned residential construction projects such as Yarrabilba (a new master planned residential community project expected to contain 20,000 dwellings and housing up to 50,000 people), Flagstone, and Jimboomba (another master planned community located between Brisbane and the Gold Coast), are under way.
Wheels turning on transport infrastructure
The 2016-17 financial year saw Brisbane City Council release its Brisbane Metro Business Case in May, following a year-long assessment of the benefits and impacts of the project. The business case found it would deliver a return $1.91 in benefits to the city's economy for every dollar spent on the $944 million project.
This year also saw the State Government agree to bankroll the $5.4 billion Cross-River Rail project, which will contribute to the necessary flexibility to work, live and do business in 21st century-style in south-east Queensland.
This capital works investment is also projected to create 1500 construction jobs over the life of the project.
Population reaches a turning point
A downside of the past few years has been that job availability in Queensland, our affordable homes and enjoyable lifestyles have not been able to attract the usual droves of Australians from over the border.
But this fall to below 10,000 migrants a year from the south is finally turning the corner, as housing affordability in Sydney and Melbourne continues to get more and more expensive.
Coupled with the recent government push to attract interstate migration by demonstrating the value of the state of Queensland in terms of livability, housing affordability and opportunity, means that migration is gaining momentum.
Brisbane’s future is bright
So the economic terrain for Queensland, and Brisbane, is changing. It is becoming more diversified, riding the powerful global forces which will continue to fundamentally change the future for Queensland. If we can navigate these changes well, the capital and the state will be offered unprecedented opportunities for growth and development.
To be a future maker, rather than a future taker, Queensland needs to be proactive by developing our regions, investing in the right enabling infrastructure, planning for the future of work, continuing our focus on innovation and entrepreneurship, and adopting and adapting the world’s best technology.
Our focus on these initiatives, and pivot to our Asian neighbours will continue to help us leverage the fact that Queensland and Brisbane have what the world wants.
And our soon-to-be released Shaping Future Cities Queensland research articulates both the economic dividend and a strategic roadmap for Queensland to get this right.