The Economic News Thread

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Re: The Economic News Thread

Post by Will »

From the Advertiser:
'Steady' SA economy improving

Business Reporter Maria Moscaritolo From: The Advertiser January 17, 2011 12:00AM

SOUTH Australia's economy is performing more strongly in some areas than it was a decade ago, but is still "in the middle of the pack".

A CommSec survey of the state of the states, which analysed the latest key indicators against decade averages, said SA's population growth - while slower than the other states - had demonstrated the most improvement over the past decade.

SA had experienced "historically high" annual growth levels of 1.24 per cent.

"Compared with its 'normal' or decade-average of 0.9 per cent, South Australia's population growth is far stronger than other economies," the report said.

The report noted that Queensland's economy was struggling before the floods and the natural disaster would act as a short-term constraint, but the subsequent rebuilding and recovery of coal production would give its economy a "substantial lift" over the second half of 2011.

In SA, areas of weakness included investment in equipment, where spending is presently 4 per cent lower than the decade average, and housing finance, which was also trending about 18 per cent lower.

However, CommSec chief economist Craig James said this was a "middle ranking" as most states had experienced softening in this area.

Retail trade was a subdued 2.2 per cent in November compared with the average, but the growth rate had started to pick up and was presently growing at a 3.1 per cent annual rate.

Overall construction work was almost 47 per cent above decade averages. Dwelling starts were a solid 17.7 per cent higher than the decadeaverage.

"What the Government has got to do is look at ways the economy can be much more responsive to the population growth," Mr James advised.

"If you have more people coming through, (it should) ensure there isn't bottlenecks preventing people accessing land and developers moving into the market."

While resource-rich Western Australia's economic growth outperformed the nation, South Australia's (5th-placed) 15.2 per cent overall growth was slightly better than that of more populous NSW and Victoria.

Overall, the ACT was in front across most of the eight indicators.

"The South Australian economy is basically around the middle of the pack, so it's not shooting the lights out like the ACT and Western Australia but it's not dragging its heels like NSW and Queensland," Mr James said.

"It's the sort of steady. . . growth or performance that most people in South Australia would be happy with."
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Re: The Economic News Thread

Post by rhino »

SA exports jump 11.3pc
AAP February 04, 2011 9:38AM

SOUTH Australia's strong export figures show its targeted export programs are paying dividends.

Trade Minister Tom Koutsantonis said programs implemented by the State Government were paying "consistent dividends".

ABS export figures show South Australia's exports jumped $942 million, or 11.3 per cent, to $9.3 billion in the year to December 31.

Even with the high Australian dollar, South Australia has been able maintain a strong export presence, the minister said in a statement released today.

``This shows the (Mike) Rann government's targeted export programs, in places such as India and China, are now paying consistent dividends,'' Mr Koutsantonis said.

On a country basis, India remains the fastest growing market for SA up $311 million (87 per cent), with China the next fastest, up $469 million (40 per cent).

SA's exports continue to be supported by growth of metal ores and scrap up $722 million (or 74 per cent), wheat (up $404 million or 71 per cent) and machinery (up $86 million or 24 per cent).
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Re: The Economic News Thread

Post by stumpjumper »

rhino do you know if education services provided for payment are classed as an 'export'?
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Re: The Economic News Thread

Post by rhino »

stumpjumper wrote:rhino do you know if education services provided for payment are classed as an 'export'?
I can't find the "toungue in cheek" emoticon :)

I guess from the point of view of knowledge going overseas, they are.
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Re: The Economic News Thread

Post by AtD »

Education, like tourism, is an export if the consumer is not a resident of Australia (money is entering the country). However I would take a guess that the article is only talking about merchandise exports. I don't know of any survey of services exports by state, but that doesn't mean they don't exist.
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Re: The Economic News Thread

Post by rhino »

SA exports jump 23pc to $10bn despite strong Aussie dollar
Nigel Austin and Daniel Wills From: AdelaideNow April 06, 2011 9:55AM

SOUTH Australia's export market has jumped 23 per cent in the past year to almost $10 billion despite the impact of the strong Australian dollar.

The resurgent rural and mining sectors led a strong rebound with income tipped to surge by more than 20 per cent to beyond $10 billion this financial year.

With grain expected to be the biggest export earner for South Australia this year, wheat shipments on their own reached $922 million in the first eight months of the year, the Australian Bureau of Statistics reported yesterday.

Meat exports also increased strongly to $445 million in the eight months, compared to $350 million in the same period of the previous year.

The mining sector also improved sharply with exports reaching $1.34 billion, up from $964 million in the corresponding period of the previous year.

The improved performance has pushed total state export income strongly higher to $6.915 billion in the eight months to February, well above the $5.148 billion in the same eight months last year.

It has placed the state on track for a strong rebound to more than $10 billion this year on the back of a record grain crop which is expected to pump $3.5 billion into the state's economy.

Industry and Trade Minister Tom Koutsantonis said SA recorded the second highest growth in the value of overseas goods exports in the year to February.

Exports for the month of February were also the highest since August 2008.

Mr Koutsantonis said the result was especially impressive given the state of the dollar.

"There is no doubt the high Australian dollar and poor economic conditions around the world have affected our export market on a national level," Mr Koutsantonis said.

"But to be recording these levels in the current economic climate is really a tribute to the industries involved and also shows South Australian exporters have risen to the challenge of the tricky market and are succeeding."
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Re: The Economic News Thread

Post by Will »

From the Advertiser:
Agribusinesses stay on growth track

Rural Editor Nigel Austin From: The Advertiser April 19, 2011 12:00AM

THE state's agribusinesses achieved their best-ever economic performance in the March 2011 quarter.

The latest Westpac and Charles Sturt University Agribusiness Index released yesterday shows South Australian agribusinesses also led Australia in the March quarter.

Westpac State general manager SA/NT/TAS Richard Hockney said South Australia did not suffer from any of the climatic extremes seen in other states.

"As a result, South Australian agribusinesses are very confident about the longer-term prospects and ramped up their capital expenditure," Mr Hockney said.

The economic performance of South Australian agribusinesses continued a steady rise seen since March 2010.

Results from the quarterly survey are used to calculate the Economic Performance Index based on the average of results for business performance, employment and investment indicators.

The EPI ranges between -1 (worst result) and +1 (best result) where a satisfactory result is when the EPI is zero.

For South Australia, the EPI was +0.25 in the March quarter compared with +0.14 in the September 2010 quarter and well above the +0.03 recorded in March 2010.

Mr Hockney said the EPI was higher in both the Producer and Upstream sectors and fell in the Downstream sector, although it was still positive in all three sectors in South Australia.

The Producer EPI increased by 12 points to +0.26, the highest ever recorded for the sector in the four years of the survey and the best in Australia.

The Upstream (suppliers) EPI sector lifted by nine points to +0.24 but the Downstream (wholesale and retail) sector fell by 16 points to +0.03.

Business performance, capital expenditure and employment all lifted for South Australian agribusinesses in March, Mr Hockney said.

Capital expenditure lifted in the March quarter by four points, and South Australia was the only state to record an increase. This was the seventh consecutive increase in capital expenditure for the state.

Mr Hockney said that with the overall performance and capital spending lifting in the March quarter, business confidence among SA agribusinesses was very high in the March quarter at 86 per cent, the highest in the history of the Survey.
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Re: The Economic News Thread

Post by Wayno »

From ABC Online - there's also a video available:
891 Mornings with Ian Henschke were joined by experts in the field of our State's economy to discuss South Australia's current balance sheet.

The Panelists
  • * Jane Kittel, managing director of Bank SA.
    * Hamilton Calder, the state director of the Committee for Economic Development Australia.
    * Darryl Gobbett, chief economist of Prescott Securities.
    * John Spoehr, executive director of the Australian Institute for Social Research and the Centre for Labour Research.
    * Richard Blandy, adjunct professor of Economics at the School of Management, UniSA.
The economy

Jane Kittel: Score 7/10

The South Australian economy has been a strong performer in the wake of the Global Financial Crisis and although there are some tough times now, there is cause for real optimism about the future.

In the short-term it is taking longer for the global economy to recover from the GFC than was originally anticipated.

For Australia and for SA, the Government stimulus packages implemented at the height of the GFC have fully worked through the system, and it is taking time for sufficient momentum to be generated again.

The good savings habits of South Australians helped the State withstand the GFC.

Those lower debt levels per household than the eastern States gave the State improved flexibility.

The business sector in SA is also going through a period of de-leveraging and is taking a conservative approach, paying down debt and positioning itself for an upturn.

However, private business investment in SA is growing faster than the national average, and is expected to pick up later this year.

With the mining and defence sectors the main drivers, SA is primed for strong growth.

We are situated in an ideal position on the doorstep of Asia and the foundations are there to capitalise further on demand from China and India and other fast-growing economies in the region.

China is already SA's biggest export destination in dollar terms with $1.25 billion in exports during 2009-10.

This was followed by the United States with $955 million, Japan at $680 million, India at $599 million and the United Kingdom at $531 million.

Overall there are more than $80 billion of projects either underway or in the planning stage, much of it in mining and defence.

As those projects come to fruition, the spin-offs into the general economy will be substantial.

One of the elusive elements right now is confidence.

There is a renewed degree of caution triggered largely by a fresh round of concerns on global markets about the public sector debt levels in Greece and the risk of default.

There are some similarities between the fears about debt levels in Greece and other European countries, and the 1997 Asian crisis.

In 1997 Thailand and Indonesia needed large financial support packages from the International Monetary Fund and were able to work through their problems.

The building blocks are in position for South Australia to prosper.

One of the major catalysts for a step-up in SA's economic growth is the decision by BHP Billiton on whether to expand its Olympic Dam mine at Roxby Downs.

The BHP Billiton board has signalled it will make a decision in the March quarter of calendar 2012.

The go-ahead would result in a truly transformation event, with an economic pact to the State of up to $48 billion.

Another important element for the future is the decision by the Federal Government in May this year to allow exploration in the Woomera Prohibited Area (an area the size of Britain).

It is estimated to hold $35 billion of mineral wealth in the ground, including 62% of Australia's known copper reserves.

Housing (including affordability and lifestyle) 8.5 out of 10

Business Investment: 7 out of 10

Gross State Product: 6.5 out of 10

Labour Market: 7 out of 10

Inflation: 6 out of 10

Overall rating for SA Economy 7 out of 10 (the average of the 5 categories above)

Hamilton Calder: Score 6/10

South Australia's economy is heavily dependent on exports and as such, the State's performance over the short to medium term will be closely linked to global issues, particularly the cost of money and the value of the Australian dollar.

Key Industries

South Australia's industry landscape has changed significantly over the past ten years, with manufacturing falling from the main employing industry to third behind Health Care and Social Assistance and Retail Trade respectively, in terms of total employment.

In fact, during 2006/07 Health Care and Social Assistance replaced Manufacturing as the sector employing the most people in South Australia and Retail Trade followed soon after.

Combined, these three sectors accounted for around 20% of the State's employment growth over the past 10 years.

Manufacturing however still rates as the leading annual contributor to SA's Gross State Product (GSP), followed by Health Care and Social Assistance, Construction and Retail Trade.

Significantly, the value of Manufacturing and Retail to GSP are trending lower, whilst Health Care and Social Assistance and Construction are trending higher.

Significantly this year, Agriculture increased its contribution to the SA economy, while Mining, Exploration and Defence are important, but still only small contributors to SA's economic activity, with significant potential to increase.

Most recent figures on SA Exports indicated that Wheat, Copper and Wine were the three largest contributors to State exports.

December 2010 figures also highlight a significant widening of SA's Trade surplus to around $500million, with exports totalling around $1billion and merchandise imports of around $500million.

Global Risk Environment

Unfortunately, the global economic, political, social and natural environments are facing significant potential risks, just at a time when the world is still struggling to emerge from the effects of the GFC.

As South Australia's economy is highly export focussed and our national economy looks to China for continued strong growth, these global risks present significant challenges to our local economy.

These risks can be broken down into five themes:

• Sovereign Debt in Europe - Portugal, Ireland, Greece and Spain (the PIGS). Concerns that a default by Greece will lead to a crisis in confidence in world financial markets, with impacts being the higher cost of money and possible economic/social breakdown spreading.

• Geopolitical Issues in the Middle East/Africa - while to be celebrated, the popular uprisings seen across the region, including Egypt, Libya and into Syria, the ongoing impact of these conflicts on crude oil supply and in turn price is a significant risk .

• US Economy - with continued purchasing of bonds by the US Federal Reserve as part of their Quantitative Easing 2 program (ie printing money), high levels of un-employment and continued dependence on foreign oil, the US economy could still move into a 'double-dip' recession.

• Global Food/energy/water nexus - As highlighted by the World Economic Forum in their Davos meeting raises the key issues of how the world will provide food, water and energy to satisfy increasing population and urbanisations on countries (particularly developing countries). Add into this category, the real and increasing risk of climate change.

• China - will the bubble burst? Are growth rates of 8% and higher sustainable and is there a risk of an urban property bubble bursting, reducing growth and in turn impacting on Australia.

There is very little that SA can do to face these risks in the short-term, however in the medium to long term, maintaining a strong diversified economy will ensure we are as prepared a possible to deal with an uncertain global risk environment

Darryl Gobbett: Score 6/10

South Australia has come through the Global Financial Crisis as whole remarkably well, given the global uncertainties, the surge in the $Aus and the expectations of higher interest rates.

The State is having to deal with the impact of some of the adverse side effects of the global commodities boom without yet seeing the benefits of the employment and investment that WA and Qld in particular are seeing.

So many of our businesses are having to deal with the impact of the national labour shortages, higher wages than overseas, higher interest rates and the higher $A on costs, demand and international competition now.

This position is not being helped by the unwillingness or inability of the State Government to draw back from its position, in state per capita terms, as a high spending high taxing government with a quite poor productivity performance.

Despite this employment is at record levels and unemployment is heading back to the lowest seen since the 1970s.

SA now faces a quite unusual situation of whether it can meet the labour force requirements of businesses in sectors such as mining and mining services, defence, health care and construction that are likely to have decades of growth ahead of them.

Agriculture too seems likely to be a growth area, particularly in cereals.

The State's population continues to grow relatively strongly and is a lot larger than many in the 1990s would have expected.

We still lose too many of our young people permanently interstate because they do not see the opportunities available here.

House prices have held up very well but land prices are far too high.

The construction sector has done a very good job in limiting cost growth.

Adelaide continues an unsustainable sprawl for what is a relatively small population and in the face of higher energy, water and building costs.

Not enough is being done for urban infill and the mixing of commercial and residential activities.

The continued geographical growth of Adelaide is increasing the costs and effort of living here, particularly regarding tarnsport, and building more social problems.

The expected growth of the mining sector and recovery in agriculture, along with a more rapidly ageing population, provides a good mix of opportunities to grow many existing and new regional urban areas.

This should see public policy looking more at what services and people can be shifted to those towns and cities and what is the regional impact of policies such as the sales/leasing of forest logging rotations, hospital amalgamations etc.

The mark would be higher if I had more confidence about the ability of SA to capture the opportunities ahead.

We are seeing another great transformation of the global economy, with China and India regaining their places as the world's largest economies and in the process bringing billions of their own and other peoples out of poverty.

But in this process, that has decades to run, we will see a focus in those countries on education, research, development and innovation that will be both another source of transformation of their economies and societies and provide major sources of demand and competition for Australia and South Australia.

I am not sure that we are equipping our people for those changes, eg with language skills, or creating the flexibility and cost structures in the public and private sectors that will allow us to engage and compete effectively.

John Spoehr: Score 7/10

Australia is an island of relative stability in a sea of economic uncertainty.

South Australia's economic fortunes are tied a continuation of this.

The story so far is a good one with economic and employment growth rates forecast to make inroads into out relatively low unemployment rate over the next few years.

We might have escaped the worst impacts of the global financial crisis but the high Australian dollar is hurting South Australian non-defence manufacturing, tourism, agriculture and retail.

If the Australian dollars stays around $1.05 to the US dollar there is potential for long lasting damage to be done to our commodity exporters.

An obsession with running budget surpluses has been a hallmark of both Liberal and Labor State Governments since the State Bank crisis.

Two decades later we might just be witnessing a rethink of this approach.

With very low levels of government debt relative to the nation and most countries in the OECD we have much more room to move than most.

Running prudent deficits makes sense as does borrowing for major infrastructure projects like the Royal Adelaide Hospital - the point of having a AAA credit rating is to enable the State Government to borrow more cheaply than the private sector can to fund major projects.

The forecast operating deficits in the State Budget recognise constraints on the revenue side, predominantly a reduction in GST revenue flowing from the impact of the global financial crisis.

This is a short-term problem that will improve as national economic growth picks up over the next few years and South Australia's share of GST improves as a result of the Western Australian Government being penalised for its decision to increase royalties on the mining industry.

South Australia's revenue will grow for other reasons over the next few years as well.

The elephant in the economic room is the proposed expansion of Olympic Dam.

If the State Government gives BHP Billiton the green light over coming months the stimulus effect of this on the State economy will be substantial, boosting employment and budget revenues.

On the downside a persistently high Australian dollar threatens serious damage to our exports.

The longer term challenge for South Australia remains the same as it has for many years - industry diversification and knowledge/skill intensive industrial development to help dampen some of the worst effects of inevitable booms and slumps.

Mining booms can deliver great benefits but they must not be relied upon to deliver prosperity for all.

At the moment the WA and Queensland booms are generating great wealth but also great disparities in the distribution of wealth and income.

They are also underpinning the damaging rise in the Australian dollar.

Richard Blandy: Score 6/10

South Australia is in the middle of an economic slow-down relative to Australia as a whole.

The South Australian Government has clearly been forced to cut spending and sell assets because of straightened circumstances.

But, thanks to the likely 2012 start of the expansion of the huge Olympic Dam copper mine, the State and the Government's fortunes are likely to take a dramatic turn for the better next year and beyond.

The State is likely to match (or exceed) the national economic growth rate by 2012/13.

Thirteen indicators of South Australian economic activity (compared with Australia, New South Wales and Victoria) are presented in Table 1.

These indicators use the most recent available data in each case.

Looking at recent economic indicators, South Australia is not doing as well as usual.

Dwelling approvals are down by nearly a quarter; overall retail sales have fallen, unlike overall retail sales in Australia as a whole, in New South Wales and in Victoria.

Construction activity is down, contrary to the experience of Australia as a whole, New South Wales and Victoria.

Newspaper job advertisements are down heavily, far more so than for Australia as a whole, New South Wales and Victoria.

(Internet job advertisements are up strongly, nationally, so it is only the relative movement in newspaper advertisements that is relevant in assessing employment prospects.)

Confirming this picture, employment in South Australia is growing at three quarters of the rate nationally, in New South Wales and in Victoria.

The only really bright spot in these numbers is expenditure on mineral exploration which is continuing to grow at a strong rate, significantly exceeding the national growth rate.

Taken as a package, these data give a picture of a South Australia that has slowed down relatively to the rest of Australia.

The South Australian Government is right to cut its spending to maintain South Australia's AAA rating (rather than raise taxes or run a larger deficit).

The mainstay of South Australia's economy - small business - needs to be given a great deal more support (by a greater focus on internet-based interaction with business, by a reduction in red tape, by support for fast broadband and by reductions in business taxes and charges).

Greater cuts to South Australian government outlays may be needed to enable this
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Re: The Economic News Thread

Post by Will »

From the Advertiser:
Building giant sets up SA base

Business Editor Christopher Russell From: The Advertiser July 12, 2011 12:00AM


Peter Gurd, state manager of John Holland, which are in charge of building the South Rd Superway. Picture: Brooke Whatnall Source: The Advertiser

CONTRACTOR John Holland has established a permanent base in South Australia.

Instead of running its South Australian operations out of Melbourne, it has opened a city centre office to oversee teams working on project sites.

"We've always been in and out of the market in South Australia, probably reflective of how the market has been," executive general manager of infrastructure Chris Evans said.

"But we see great potential in the SA market and we're delighted to be here with a permanent base.

"We've often worked from project bases and we've had depots for our rail group in SA for some time but we've never had a full, properly integrated John Holland Group office in Adelaide itself.

"That's reflective of the confidence we have in the way the market's going."

State manager Peter Gurd said the new Pirie St office would co-ordinate the various divisions.

"We have rail, water, building and civil all operating out of this one space," Mr Gurd said.

Projects under way, including joint ventures, include the Urban Superway, the rail revitalisation project and ancillary work for SA Water's north-south interconnector.

"We've also submitted a first stage tender for the Southern Expressway duplication," Mr Gurd said.

The company has also been shortlisted for the University of SA's new Learning Centre in Hindley St and will bid for the construction of the new $125 million Tonsley Park TAFE.

"Then, of course, the one everyone's interested in is Olympic Dam," Mr Gurd said.

"There's desal to go in, there's rail, there's ports, mining camps, towns, power, sub-stations - and we'd like think we're well placed to cover nearly all of those as the opportunities come up."

John Holland helped build the Sydney and Gold Coast desal plants which used marine tunnelling, the method now proposed by BHP Billiton for its Point Lowly plant.

The company, a subsidiary of Leighton Holdings, has been active in SA since 1953.

Recent works include Noarlunga Hospital, the Urbanest student accommodation and the Cathedral Rocks wind farm on the Eyre Peninsula. The company tries to employ local people and engage local subcontractors and suppliers.
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Re: The Economic News Thread

Post by Nathan »

Looks like the new office is in Aurora on Pirie St.
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Re: The Economic News Thread

Post by Wayno »

Surely this can't be true? ... 6095011581
Adelaide residential land values shoot up by 200 per cent, overtaking Sydney for first time

ADELAIDE'S residential land is now the second-most expensive in Australia, topping Sydney for the first time. The price per square metre has jumped by almost 200 per cent, from $165 to $487, in the past eight years, figures released yesterday show.

Housing Industry Association SA executive director Robert Harding said the latest figures had contributed to a 39 per cent slump in the sales of vacant land to less than 800 for the March quarter.

The HIA-RP Data Residential Land Report showed the median price for a block of land in Adelaide in the 2011 March quarter was $180,000 - down 3.7 per cent on the previous quarter.

Adelaide's median block size of 370sq m is the smallest of all capital cities.

Only Perth in resource-rich Western Australia - at $532 per sq m - was more expensive than Adelaide.

"What it says is for the size of land that you are getting, it's not good value for money," Mr Harding said. "It's only the small size of the blocks in Adelaide that keeps us affordable.

"If our blocks were the same size as in Sydney or Melbourne, then it would be very difficult for people in Adelaide to afford it."

Mr Harding said while demand for land was being met, Adelaide's land price was still recovering from a period of minimal land releases during the past decade.

"We had four of five years where we had restricted land supply, and that was a deliberate policy," he said.

"In the past 12 to 18 months, it seems that more land has come on stream, though we are still suffering because of those years of restrictive land supply.

"While the supply side of it has improved, what we are still facing is the speed with which land releases are progressed through the planning system."

Urban Development Institute of Australia SA executive director Terry Walsh said the high cost of infrastructure in new developments was often passed on to consumers as higher land prices.

He said the slump in sales was hitting the economy.

"If people aren't buying land, then they are not getting building contracts, which then has a flow-on effect for the whole market," he said.
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Re: The Economic News Thread

Post by Queen Anne »

So, if I'm correct, this was a report by the HIA itself - who are interested in seeing plenty of land released (and released as quickly as possible, by the sounds of Robert Harding's comments). This sounds like the sprawl machine in action to me.
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Re: The Economic News Thread

Post by Wayno »

an interesting read, and a few projects/studies (highlighted in red) that caught my attention simply because it's the first i've heard of them... ... wers-civil
Almost nowhere else in Australia is the two-speed nature of the construction industry evident than in South Australia.

At the moment, overall construction in the state is subdued. On a seasonally adjusted basis, the overall value of construction work done came in at $2.356 billion, according to the Australian Bureau of Statistics (ABS) – down 8.7% when compared with an admittedly high result in June and the second lowest level on record since September 2009.

The overall result, however, masked the discrepancy between a booming engineering sector and a struggling building industry. At $1.278 billion (seasonally adjusted), the value of work done in civil construction was the second highest on record, and was up by more than one quarter on the same period last year. However, at $1.078 billion, activity in building was at its lowest level since March 2008.

Going forward, this discrepancy looks set to widen further. Strong activity in engineering construction will be driven by BHP Billiton’s $20 billion Olympic Dam expansion and other civil projects such as the Southern Expressway duplication and the Ceres Wind Farm project. Work on military construction facilities will also receive a boost with the state government chasing $23 billion worth of contracts to create a defence manufacturing hub at Edinburgh.
BHP Olympic Dam Expansion

BHP Olympic Dam Expansion Project

Also, thanks to work on the new Royal Adelaide Hospital and the recent sign off for the Adelaide Oval, some areas of non-residential building are not faring badly. Indeed, seasonally adjusted approvals in non-residential building were up by 136% in the three months to November – though this number is typically more reflective of a few large projects than an underlying trend.

Housing, however, is a different story. Despite a nation-wide increase of 8.4%, the number of residential buildings approved actually fell in South Australia during November, and were down by more than one fifth compared with November 2010. Also, South Australia is the only mainland state in Australia to where sales of new homes are falling. According to Housing Industry Association, the seasonally adjusted number of new detached houses sold in the state plummeted 11.3% in November – a terrible result against an overall nation-wide increase of 6.8% in new homes sold during the month. This means that new residential building work is coming in more slowly than before, with near term housing construction activity likely to remain subdued as a result.

The two paced nature of the state’s construction sector is also reflected in the broader economy. Thanks largely to the resources boom, private capital expenditure in the state during the September quarter was up a respectable 12.7% on the same period in 2010 (seasonally adjusted). The state’s broader economy, however, shrank by 1.5% in the September quarter even as the national economy expanded.

Workers in the state are becoming easier to find. The number of people employed in the states construction sector during the three months to November stood at 56,900, according to the ABS – down from 65,800 in the same period last year. Going forward, with the latest Master Builders survey indicating subdued employment intentions nationwide, South Australia’s construction labour market may yet weaken further. Nevertheless, with BHP anticipating a peak construction workforce for the Olympic Dam expansion of 6,000, there may be shortages for some skilled trades impacted by that and other large-scale resource construction projects around Australia in the foreseeable future.

Key Moving Sectors

There is plenty of action in mining and other engineering construction sectors as well as a reasonable amount of action in building on healthcare and sporting facilities.

Thanks largely to the start of work on Olympic Dam, mining construction in the state is going from strength to strength.

Key projects:
* Olympic Dam Expansion
* Wilcherry Hill Iron Ore Project
* Arckaringa Coal to Liquids Project
* Minerals Carrapateena Copper-Gold Project

As mentioned above, construction activity on military and defence facilities in the state will receive a significant boost from the state government’s efforts to develop Edinburgh as a hub for manufacturing, integration and maintenance of military vehicles and equipment.

Key projects:
* Edinburgh defence hub plan

Civil (Energy/Water/Communications)
Thanks to the Ceres Wind Farm, and a study underway to deliver water from the Kimberly to the Murray, there is a reasonable amount of activity happening in civil construction.

Key projects:
* Ceres Wind Farm
* Kimberly to Murray pipeline (study)

* National Broadband Network

Thanks to the start of work on the Southern Expressway Duplication project, there is a reasonable amount of activity in Transport construction.

Key projects:
* Southern Expressway Duplication Project
* Adelaide Rail Electrification Project

Work on the Royal Adelaide Hospital is helping to drive healthcare construction activity.
* New Royal Adelaide Hospital
* SA Health e-health system contract

Sport construction has been given a boost by signoff in November for the $350 million redevelopment of Adelaide Oval.

Key projects:
* Adelaide Oval Redevelopment
Opportunity is missed by most people because it is dressed in overalls and looks like work.
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Re: The Economic News Thread

Post by AG »

Whoever coined the term "two-speed economy" makes the situation sound more simplistic than it really is and really deserves to be shot. There are some contractors in the construction industry that are actually doing quite well from winning some of the big projects. While there's quite a few large projects delivering work for the few companies who win contracts for them, there's less small and medium size projects going around for other companies to pick up. On the mining side of things, there are quite a few companies that provide services for clients in the mining industry that are gaining quite a bit of work including accountants, lawyers, accommodation companies and other service groups.
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Re: The Economic News Thread

Post by phenom »

stumpjumper wrote:rhino do you know if education services provided for payment are classed as an 'export'?
AtD wrote:Education, like tourism, is an export if the consumer is not a resident of Australia (money is entering the country). However I would take a guess that the article is only talking about merchandise exports. I don't know of any survey of services exports that doesn't mean they don't exist.
I know it's poor form to 'revive' a thread, or at least part of a thread that has died away, but since this is the 'economic news thread' and it was asked... AtD is correct in the definition of education exports as well as the focus on merchandise exports. Almost *always*, media reports on 'exports' refer exclusively to goods (or merchandise) exports as they are much easier to value (usually through customs) and are thus collated more frequently (monthly). You should therefore assume service exports are omitted from any media reference to exports unless specifically mentioned.

The ABS does provide export of services data on a State basis but only on an annual basis - which it updates twice a year (ie providing a calendar year data set[email protected] ... endocument and a financial year data set[email protected] ... enDocument.

Therefore, you should add the relevant merchandise and service exports together to arrive at a 'true' total export figure.
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