Townsville floods reconstruction welcome stimulus
Six months after the devastating Townsville floods, the region’s peak marketing body for North Queensland, Townsville Enterprise, has provided an update to its members on the outlook of the Northern Australia regional economy.
In its quarterly economic snapshot, TEL reflects on the February 2019 Townsville floods which impacted 3,000 homes and local businesses.
The flood recovery was a key aspect of Townsville’s slow and sustained economic recovery over the past quarter, the regions marketing and lobby organisation said.
“Many residents are beginning to return to their homes post-flooding; however, reconstruction efforts are expected to remain a significant driver of economic activity for some time to come,” TEL reported.
On the back of the stimulus of reconstruction activity and the $300 million expansion of the Sun Metals refinery, the “broader economy had shown increasing strength.”
The beginning of construction of the $2 billion Adani Carmichael Coal Mine has also been a key factor in helping to “improve the employment outcomes and sentiment across the region.”
The unemployment rate has fallen from 8.5% to 7.8% in March. However, the seemingly positive performance in job numbers has occurred in part due to 1800 people that have exited the labour market because of the Townsville floods.
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North Queensland Regional economic outlook
The North Queensland economy is facing continued risks due to the downturn in residential construction activity. Just 459 new dwellings were approved in the past year.
Availability of capital for investors and homemakers has restricted buying and building settlements.
“Restricted lending conditions and years of weak employment outcomes continue to constrain demand for new dwellings and housing purchases generally. Weakness has persisted despite record low interest rates and an extremely tight rental market,” TEL reported.
As the Townsville floods recovery and reconstruction works wind down in the coming quarter, TEL said, the “labour market, population growth and housing market statistics will be of key interest over the coming months to gauge the trajectory of the North Queensland economy.”
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