Wednesday, April 30, 2014

Milk Powder trumps Tim Tams

A sign of the times. Woolworths Cairns CBD store tonight Chinese tourists with trolleys full of home brand milk powder!

I was too polite to our guests to request a photo of any of their numerous trolleys well stocked with several Kg of milk powder perambulating the aisles so wandered around to the milk powder section:

 
Times past the Woolworths CBD store in Cairns was renowned as the highest volume retailer of Tim Tams in Australia as the Japanese stocked up for the return flight. What is the excess luggage weight limit on those China Eastern flights again?
 
 

Monday, April 28, 2014

Tourism and the exchange rate

Thinking about any correlation between the exchange rate and tourism a more relevant approach may be to consider both arrivals and departures in the way that Macrobusiness derive a net arrivals (tourism deficit = arrivals - departures): Bogan exodus drives record tourism deficit

To allow for growth in the tourism market over time I have represented this on a proportional basis with arrivals as a percentage of departures since 1976 (LHS). For the exchange rate here I have inverted the Trade Weighted Index (RHS) as a broader indicator then the $US.

 
 

Joint Select Committee on Northern Australia

The Joint Select Committee on Northern Australia is conducting public hearings today and tomorrow down at the Cairns Council chambers.

Most of the more substantial groups such as Council, TTNQ, Advance Cairns, Ports North and Cairns Airport seem to be front loaded into the program and apart from that it's probably not worth the effort unless for the entertainment value of the chairman. It always takes me a good week, and substantial liver damage, to recover my senses from any event featuring the Member for Leichhardt.

Transcripts will be available at the parliamentary committee website anyway. There are also 251 submissions most of which are likely predictable. However I can recommend submission #4, and particularly attachment B to that submission, as a cracking read on agriculture, irrigation and the northern food bowl:

While economic growth in Asia has proceeded apace, it does not follow that this fortuitous circumstance is any more favourable to the north of Australia than agriculture in the south.

Dr Watson is an economist associated with the Centre for Water Policy and Management at La Trobe University.

The Cairns Post also recently reported on the Airport submission which included a recommendation to make itself a special economic zone:
Push for investment to attract Chinese tourists.


Also now comments from Saul Eslake: Goodman Fielder bid shows grain of salt is needed on food bowl hope
Mr Eslake said Australia had ''no unique advantage'' in food production. This compared with the mining boom in which Australia and Brazil's rich iron ore deposits made them the only beneficiaries of China's rapid industrialisation. When it comes to food, Australia is competing with New Zealand, Brazil, the US, Canada, some European countries, Russia, Ukraine and even some parts of south-east Asia.

Sunday, April 27, 2014

The Oprah Winfrey Tourism Recession?

The Brisbane Times reports on High hopes for Modern Family's Australian episode
Airing to 9.2 million US viewers on Wednesday, the episode will eventually hit a global audience of 125 million in what tourism bosses hope will be a priceless half-hour advertisement. 

The report describes "hackneyed stereotypes" and a media campaign by Tourism Australia to leverage the exposure. There are claims of substantial benefits for previous such exposure.
Oprah Winfrey's visit in 2010 saw half of US visitors the following year influenced to come here by the TV show. Ellen DeGeneres's Australian episode last year saw an inbound flights boosted by 22 per cent according to Qantas.
Previous posts here have indicated some cynicism on such claims and particularly the sustainability of such gains. Information and research on Oprah's Ultimate Australian Adventure can be found at Tourism Australia with qualitative positive outcomes reported. However the ABS chart of short term arrivals from the USA doesn't appear to show anything much at all in what was actually a weaker period in arrivals from the USA.


Oprah visited in December 2010 and the episodes screened in the USA in January. One could even be cruel and suggest that arrivals from the USA started to roll over as soon as Oprah announced her intended adventure in September 2010? That would be unfair as obviously there can be a gap of some months between an event, bookings and travel. Also leisure travel is only a component of ABS arrivals which include such a business travel.

Google Trends do indicate increased search traffic on "Australia" in the USA at that time. However I can't find any such Google Trend related to Ellen DeGeneris last year, who frankly I have never heard of. Arrivals from the USA have been robust in the past year with 12.2% trend growth in the year to February 2014. I doubt that Ellen is mostly responsible for that growth.

The GFC, recession and recovery will also likely have had some impact on travel trends from the USA. The chart above also graphs the $AUD in terms of the $US. It is the inverse of what is reported on the nightly news and how many $AUD a visitor can buy with a $US. I have skilfully manipulated scales and a 6 month rolling average to emphasise any correlations.

With the G20 coming up there are certain to be further interesting reports and claims on economic benefits of such events. I note that the Member for Cairns referenced such in his recent Chamber presentation which I may return to.

Related Posts: The Paul Hogan Myth; Events Extravaganza Expose; G20 Hyperbole?

Links: USA Market Profile from Tourism Australia; Modern Family episode a fail for FNQ tourism by Sam Davis at Newsport; A review: Modern Family's Australian episode was a clich├ęd travelogue

Saturday, April 26, 2014

Tourism & employment (preliminary)

A report in the Courier Mail today: Queensland tourism boost driving jobs growth
QUEENSLAND’S tourism has returned to good times with major centres creating thousands of jobs while investment spiked by almost $5 billion nationally last year.
And it appears casinos are what will drive the industry into the future with the Tourism and Transport Federation (TTF) report yesterday showing that mixed-use facilities are where investors are pouring their money.
On the back of record visitor numbers last year – mostly from China – the Gold Coast, Cairns and the Sunshine Coast reported major reductions in unemployment, but experts say the jobs are spinning off into areas not traditionally seen as tourism related.              
The small-area labour market figures, which break down unemployment into suburban areas, found that there had been a 12 per cent fall in the Maroochy jobless figures for the year to December. Noosa had a similar fall while Caloundra fell 6 per cent and the Cairns jobless numbers fell 16 per cent for the year, although youth unemployment remains high in the far north.
I couldn't find anything posted at the Tourism & Transport Forum (TTF) and suspect the report referenced is actually the Tourism Investment Monitor 2014 from Tourism Research Australia. However there is minimal relevant discussion there on employment. The numbers quoted at the CM are Small Area Labour Markets (SALM) from the Department of Employment.

As we know from regular discussion of the deficiencies in our regional labour force data a decline in the number of unemployed does not necessarily translate into increased employment given factors such as participation. While the SALM data is based on the ABS labour force stats it comes with some quirks, with inputs also from census and centrelink data, and a specific warning not to infer employment from the methodology.

Looking through all the data available and whether or not any decline in the number unemployed may have translated into increased employment the result would probably be: Sunshine Coast yes; Gold Coast maybe; Cairns no.

There are many other aspects worth a look here and like our regional labour force geographical reporting changes are also subject to change with the next SALM report based on the SA2/3/4 boundaries. Links: ASGS Boundaries Online

Also note that the SALM methodology is still based on 2006 census and presumably this will be updated with the next quarterly numbers along with the geographical update.

There was indeed a 16% decline in the number of unemployed in Cairns based on the SALM methodology if one wants to look at it that way rather than as a proportion of the labour force and subject to the above qualifications.

However on a regional basis comparable with the SA4 format from ABS that decline in Cairns itself was actually lower than surrounding regions. Yarrabah topped the score with a 44.8% decline in the number unemployed.

I think I will await a geographically updated and census revised version of the small area labour force data.

Update: Thanks to Conus for the link and comments more succinct than I could manage: http://www.conus.com.au/_blog/eco/post/140426/

Thursday, April 24, 2014

Ita is (not) on TV but filling dams anyway

Cyclone Ita recently passed through the region promising much but thankfully delivering less. Very sadly I can't seem to find a convenient Google link to the retro Skyhooks song lyrics which included "Ita is on TV"?

Agricultural lobbies appear to have been on TV though or at least in the media following Ita. There are many reports re impact on fruit, vegetable and sugar cane. I'm sure there have been and there will be some impact flowing through to some consumer retail prices and also on the sugar crop however......

When it comes to some media reports of 90% losses on the sugar cane crop my rural media contact suggested:

"Complete beat up inspired by over zealous Canegrowers press release & lazy journalism"

Indeed. Meanwhile Ita did deliver a welcome late season boost to dam levels at Tinaroo which had previously been lower than for several years:

 
Note: Metereological models continue to project a modest El Nino in coming months.

Monday, April 21, 2014

Rental vacancies, housing & population

Rental vacancies are back in the news with some recent numbers from REIQ: Rental vacancies tight in Cairns as market tightens up.
Vacancy rates in Cairns dropped from 2.2 per cent to 2 per cent last month
The numbers are quarterly not monthly I think? The Cairns Post also reports from the local REIQ representatives that the region has run out of stock and that renters should buy. Well they would say that wouldn't they?

The REIQ rate is derived from a survey of accredited members. Meanwhile the most recent HTW survey in CairnsWatch indicated a trend vacancy rate of 2.6% in February. I will await the next update from HTW for March however a quick look at some previous comparisons indicates the REIQ number will typically be lower.

SQM Research also provide some free info and graphics on rental data which is worth a look and also currently indicating a vacancy rate around 2.2% for Cairns. I have no idea how SQM aggregate this information however a search on their postcode data graphs also display the number of vacant properties for each postcode and throw up some interesting differences in vacancy rates within Cairns. Some of that difference may correlate to house v units but probably not all when it comes to south v north.

SQM%
Bonds
4868
1.3%
2623
4869
1.1%
2009
4870
2.0%
11458
4878
3.0%
1866
4879
3.7%
2937
Cairns
2.2%
20893


The Residential Tenancies Authority (RTA) also released updated quarterly data recently and the second column there is the aggregate number of bonds lodged at March 31st for each postcode. If I combine the nominal number of vacant properties in March from SQM with the bonds data I actually come up with a vacancy rate of 2.6% for Cairns but no idea on validity of this and it isn't clear what area SQM uses to define their 2.2% rate for the broader Cairns region.

The previously downward CairnsWatch trend vacancy rate recovery actually bottomed back around 2H2012 with the most recent report:
Vacancy rates in the Cairns rental market have been increasing since mid 2013, but are still indicating modest rental shortages relative to supply.
 
The bonds data from the RTA dates back to the March quarter 2011 and may provide some interesting perspective. This is the quarterly change in the number of bonds lodged for Cairns over that period (Postcodes 4868,4869,4870,4878,4879).

 
The aggregate number of bonds lodged actually declined slightly in the March quarter whereas in the two previous corresponding periods growth was quite strong. The trend in vacancy rates since mid 2013 also coincided with weakness in the labour market.

The RTA data for median rents also indicates relatively benign increases over the past year. The two largest cohorts: 2br units 1.8%; 3br houses 2.9%. It was actually the previous year when the vacancy rate was falling that rents for these lifted well above inflation: 2br units 7.8%; 3br houses 6.3%.  Historically low vacancy rates have not been exclusive to Cairns. Most capitals and other regional cities in Qld currently sustain comparable rates.

There have been some estimates recently of housing supply relative to population for Australia and the states. Some very rough back-of-a-drink-coaster calculations for Cairns based on 2% population growth (1.9% FY2013) and 2.5 persons per household (2011 census) would indicate a number still way above current building approvals.
 
 
Update: The SQM methodology:
SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties. SQM considers this to be a superior methodology compared to using a potentially incomplete sample of agency surveys or merely relying on raw online listings advertised.

Saturday, April 19, 2014

Good & Bad News Weekend

A very quiet Easter weekend but the Cairns Post has lobbed up a couple of interesting but perhaps dichotomous yarns: Cairns swamped with development applications as activity picks up
CAIRNS is poised to reap the economic rewards of red-tape reduction and rich incentive schemes, with local development applications at a three-year high.
With more than two months left in the financial year, there have already been 386 applications lodged with Cairns Regional Council, outpacing previous years. 
A key indicator of a city’s growth, 60 development applications were lodged with the council in March alone - the highest number received in one month since 2010. The proposals comprise a mix of commercial and residential projects across the city. Building applications are also at a three-year high, while the number of new lots created are on track to be the highest in recent years.
Swamped I tell you! There is even a photograph with the accompanying caption "boom town". While the reported increase is positive and to be welcomed this again needs to be kept in historical perspective of a recovery rather than boom. I'm too lazy to do my own research and there are some nice easy stats and graphs on Cairns available at economy.id.com.au:

 
This is the value rather than number of approvals, both residential and non-residential. I don't think these numbers are adjusted for inflation and certainly don't take into account the substantial increase in Cairns population over this time frame. The numbers themselves at that link also tell a story with Cairns as a % of Queensland at a new low last year and substantially under-representing the proportion of the population and economy.
 
There is something of a dichotomy here for the Post between the boom and the latest employment stats on the same day:  Cairns unemployment figures climb to 10.1 per cent.
Herron Todd White research director Rick Carr said while the region’s unemployment rate typically increased this time of year due to its seasonal workforce, the new figures reflected a weak market.
“Unemployment usually goes up at this time of year. however, in the first three months it has gone up more than usual,” Mr Carr said. “There isn’t a lot of confidence out there. Businesses seem to be more concerned about staying afloat than hiring for the next boom.”
The public sector and mining have taken some attribution there for the weakness in Cairns over the past year. I'm not sure how well this works as an explanation for Cairns?

Thursday, April 17, 2014

Conus: Nothing good in the regional jobs data

That about sums it up from Conus with nothing much more to contribute apart from the customary warning on the regional data: Nothing good in the regional jobs data

Seasonal down time of year maybe but participation rate chart is looking quite dismal.

Tuesday, April 15, 2014

Clean for Gene: Strong Choices or Weak Leadership?

Economic issue du jour in Queensland has obviously been the weekend launch of Strong Choices where you can 'interactively' contribute to solving our 'debt crisis'. Problem is .... not quite so interactive ..... and really an online version of push polling which could actually have some quite negative consequences for genuine political leadership and policy reform.

It is clearly designed to achieve a specific outcome. I started to wander through but then gave up when it was obvious the explanatory information was severely biased on specific options. It is simply not possible for anybody to make an informed opinion on cutting programs or asset sales on the information provided.

Sadly, there was no interactive option which allowed me to play with abolishing stamp duties on insurance and property transactions in return for a broad based land tax. More sadly the responses they are likely to receive on the info provided could well lock out any such reform. The explanatory information provided on land taxes will inevitably skew a more negative response.

John Quiggin has weighed in hard and early with a negative response most of which is predictable but also coherent with valid aguments. Some of the justifications being used for privatisations just don't work and never have particularly in relation to revenue from the government corporations, which also carry a good chunk of the debt.

However Prof Q has also previously to my recollection argued that assets must be considered on an individual basis. When the Bligh privatisations were announced he went through the list: Queensland privatisations: good, bad and ugly.

This is the problem I have with those totally opposed to any and all asset sales. Such a policy would mean the State of Queensland would still run the butcher shops once owned. There is a clear difference in electricity between generation and transmission assets with the latter a natural monopoly. This is sort of rather vaguely referenced in the survey with a different form of private funding not adequately explained. You can argue for and against the privatisation of both these assets but the argument can never be the same for both if it is to remain rational.

Anyway I think Gene Tunny at Queensland Economy Watch has pretty much nailed it on this: Qld Treasury needs to explain logic of asset sales much more clearly
It’s not too late for the Government to win the debate on asset sales, but it needs to present more compelling logic. The Government’s current arguments for asset sales are too simplistic and probably won’t persuade the public. The Government should ask the Treasury to produce a solid report presenting the pros and cons of privatisation – analysing in detail the merits of selling particular assets such as energy businesses and ports, directly addressing the question of whether they would be better run by the private sector. The Government should then present this analysis to the public in speeches and informative publications and websites.
I think Gene also gets this right that debt reduction may be desirable but is not a life-or-death issue as is being portrayed. Gene has also apparently appeared on ABC radio on this although haven't had a chance to listen to check the veracity of the headline: Economist labels "Strong Choices" a joke

Note: "Clean for Gene" was the campaign slogan for Gene McCarthy in the volatile 1968 US presidential campaign.


Update: Gene has posted further on this: Strong Choices poorly received by public; There is also a withering and entertaining response from columnist John Birmingham at the Brisbane Times: Mr Strong Choices thinks you're an idiot. John Quiggin has also now weighed in again: Tim Nicholls makes a little progress in thinking about privatisation

Monday, April 14, 2014

Airport numbers for March

Traffic numbers at Cairns Airport for March show a modest increase of 4.1% on 2013 at the domestic terminal while international continues to be weak with a significant decline on the previous year.


Again we should probably be cautious around the timing of significant events. Last year Easter was the last weekend in March with Easter Sunday on March 31.

 
It was also a relatively small bounce in domestic traffic from the traditional February low. The growing influence of Chinese New Year may be partly responsible for that.
 
 



Sunday, April 13, 2014

Cyclone Ita: Cairns gets lucky again!

After the extreme impacts of both Larry and Yasi previously slipping south, north being the favoured side to be, what could be luckier than a severe cyclone which lands sufficiently north, circles around behind the mountains, then pops out offshore again off Townsville? If this keeps up we may have to stop calling it Brownsville!

Just a day after a lovely evening on the Cairns Esplanade with an almost full moon rising over the inlet .......

 
Note: suggested storm surge possibility didn't make it anywhere close to king tide highs of earlier in the year!

Wednesday, April 9, 2014

The ups and downs of house prices

While I'm on a roll with (mis)statements from the Member for Cairns it was also noted that rising house prices were among his positive economic indicators. When challenged on this and the related issue of rising rentals his FB response included:
According to the latest Census data from the Australian Bureau of Statistics, 57% of homes in Cairns are owner occupied or are people paying off a mortgage, compared to 39% who are renting. So the majority of people in Cairns will benefit from rising house prices.
These are indeed the (rounded) numbers for the Cairns Regional Council area from the 2011 census. I wonder what happens when we look more specifically at the same data for the state electorate of Cairns?
Owners: 47.8%
Renters: 48.1% 
Oops! Looks like most of those 'winners' are more likely to be in Mulgrave or Barron River?

 
I wont delve into debate on the general desirability or otherwise of rising house and more particularly land prices, or how this may relate to circumstances in Cairns. There is currently a parliamentary inquiry into affordable housing with a range of submissions. Contributions from people such as Saul Eslake and Catherine Cashmore should be worth a browse among others. The submission from The Australia Institute makes particular note of the impact of housing prices on inequality. 
 


Sunday, April 6, 2014

Why no circus in Aquis Casino proposal?

The caravan rolls on and perhaps a circus is a missing element from the updated Aquis development plans most recently revealed : Stakes high as mega casino rolls into view:

NOT since the early days of the white-shoe brigade in Queensland — when developers waltzed in and out of the top offices of the Bjelke-Petersen government — has the talk been so big, the stakes so high.
At least The Australian is capable of a balanced approach unlike the advertorial spin from their News Ltd comrades at the Cairns Post. Although am unsure on the description of a current Yorkeys Knob high-rise?
Easily the most expensive non-resources project in Australia, the 340ha complex is proposed to be built on cane fields in the sleepy seaside suburb where a timber shack with a garage underneath is considered to be high-rise. It seems Tony Fung — a Hong Kong businessman who last year burst out of nowhere with his plans for the mega-­casino resort — has got almost everyone on side. Politicians are talking it up, businesses are making plans to expand and families are designing extensions to their homes to rent to the 9000 construction workers and 10,000 permanent staff if the casino gets the go-ahead. It has sparked a frenzy of support in Cairns, where a multitude of ills — severe acute respiratory syndrome, the global financial crisis, cyclones and lack of new investment — has depressed the local economy to the extent that it has the highest youth jobless rate (21.6 per cent) in Australia.

The high-rise description appears incongruous with such as the beachside unit of Warren Entsch, member for Leichhardt, however. The report then includes critical commentary from Professor Jon Nott on the location; Pam Bigelow from the Yorkeys Residents Association is also opposed; and Justin Fung was interviewed from Hong Kong.

I can't recall it being previously reported that the Fung family was actively funding some community groups which support the development? Mind you there is also other news reported from inside the circus tent and disappointment expressed with the Newman Government.

With the resort set back from the beachfront, and sealed off from the neighbouring waterways, Tony Fung had hoped to avoid a drawn-out approval ­process. 
Labelled “the bad boy of the stockmarket’’ by the HK Economic Times, he has had a simple message for the Newman government since announcing his plans last year: approve the resort quickly, or he will go somewhere else. 
One senior official, involved in the assessment of the project, said that pressure to approve the resort quickly was intense, especially as the state government approaches an election, due early next year. 
“It is a frenzy up here — people are desperate to get this thing happening, ‘’ he said. 
“And it is not just Fung either; the locals are pushing hard, and anyone who raises questions or concerns is shouted down or lined-up.’’ 
Mr Fung has repeatedly warned that he will go to Japan, The Philippines or South Korea — where casino licences are soon to go onto the open market — if he is made to wait too long. 
"The window of opportunity that is available to us is limited … there are a lot of people going after a piece of the action and the competition for me is not Mr (James) Packer or Echo (Entertainment) but from other countries,’’ he said last year.

Should he choose Japan then Mr Fung will indeed run into competition from Packer who is reported today to have plans for a $5 billion proposal. Japan is similarly opening up to casino developments via a competitive process and Sheldon Adelson from Las Vegas Sands has also previously said he will spend whatever it takes there.  Unlike the still absent Tony Fung the latest Forbes billionaire reports list Sheldon at US$ 40.8 billion.
The decision last year to call for a competitive process is understood to have enraged Mr Fung, not least of all that it delayed the project’s earliest date that it can begin building by at least a year, to next May. 
He sacked his local lobbyists — including former conservative premier Rob Borbidge — before rehiring him in the new year.

Yet again the Cairns-friendly Fung family on closer analysis don't sound quite so cuddly after all in this report? However the risk of withdrawal from the project is assessed as low:
But he is unlikely to make good with his threat and pull up the surveyor’s pegs on the project anytime soon.

The Aquis Casino FB page has reposted The Australian report in full with a typical commentary response from the bogantariat:
Tanya Knepper please don't give up by going to Japan, The Philippines or South Korea, there is so much more here that will attract visitors to this picturesque place, where the rainforest meets the reef, at least make them say no to your license first, and if they do, those responsible wont get my vote in upcoming elections.

Tanya actually seems to live in San Francisco and her FB preferences display a keen interest in the paranormal!

Meanwhile good mate Nick Dalton at the Cairns Post has assured everyone that everything will always be OK environmentally and stuff because the consultant says the proponents have enough cash to solve any problem! How would the planning and environmental consultant know that? I think there should be a hefty security lodgement on this one actually similar to what is required of any mining development?

Nick has based his most recent report on recently lodged documents at the Fed Environmental department.

Aquis Resort at The Great Barrier Reef Pty Ltd/Commercial development/Yorkeys Knob Rd, approximately 13kms north of Cairns/QLD/Aquis Resort and Casino at The Great Barrier Reef 

Saturday, April 5, 2014

Cairns population growth estimates by suburb

The ABS released regional population estimates earlier this week which has the Cairns Post lamenting the current rate of growth: Cairns lags behind the rest of Far North Queensland in the population stakes
The Australian Bureau of Statistics has revealed Cairns had a population growth of 1.9 per cent from 2012-13, the slowest of any major city in northern Australia. Townsville, Mackay, Rockhampton and Darwin all recorded bigger growth.
Apart from that headline requiring some geographical editing this should also be kept in perspective. That population growth rate for Cairns is in line with the Queensland average. Perhaps the headline could have been that all the northern tropical cities continue to grow above the Queensland average?

Those numbers are also Local Government Areas (LGA) and in comparing cities perhaps the Significant Urban Area (SUA) may be more appropriate. Cairns SUA grew at a slightly faster 2.0% rate which is the same as Brisbane, Sunshine Coast, and Gold Coast. Rockhampton SUA growth is 0.2% lower when the Capricorn Coast/Livingstone Shire area is removed from the LGA while Cairns growth rate increases 0.1%. Amalgamation & De-amalgamations are not yet incorporated in the LGA estimates.

In line with this it is also noted that in the state electoral division data (SED) that Cairns at 2.1% grew faster than both Barron River and Mulgrave which extend out beyond the city SUA limits. This is the SA2 population growth estimates chart of the range for the Cairns suburbs:

 
Trinity Beach-Smithfield was easily the largest there in terms of total growth in numbers however some of the growth rates here may surprise slightly (Manunda?). These are estimates from ABS based on a number of factors.
 

Thursday, April 3, 2014

Sqwarking parrot overwhelms shark jump as tourism attraction!

So it came to be that the Member for Cairns came to announce positive economic news for Cairns via his Facebook forum of ignorance and sycophancy:
Three bits of great news released on the economic front today:
 * The QLD tourism industry contributed $23 billion to the state economy in 2013 - an increase of $3.5 billion since the 2012 election - and tourism jobs increased 13 per cent over the last two years (source: Australian Bureau of Statistics) 
Well, yes, that is only one bit and issue will be taken subsequently with the Parrot also reviving faith in the property price Ponzi as a source of economic growth. Not sure if he cleared this first with Guvnor Glenn?

However, when it comes to the numbers above it is noted that he has since adjusted the source to the State Tourism Satellite Accounts from Tourism Research Australia. The numbers he has posted are copied from a media release by tourism minister Stuckey. I must say these accounts make fabulous use of input-output multipliers! Which is subject for a future post!

I'm not sure and will check where the $23 billion comes from but presume it relates to tourism consumption rather than GDP or other measures in the accounts? (refer to comment below from pete Faulkner at Conus). The numbers here also relate to financial years with these most recent accounts for FY2013. Consequently any reference to changes "since the 2012 election" are spurious anyway, or what some would call a "lie".

The employment number over two years is particularly interesting also. Again, the numbers here relate to financial years with most recent FY2013. So the 13% increase is since FY 2011 which was the most depressed low for Queensland tourism and the year when Anna Bligh famously declared that Qld was underwater.

Almost all of that increase was actually a recovery in FY2012. When was the election again? The increase in FY2013 was actually a quite low percentage but will check and post a graph on that as there are a few different numbers in these accounts to digest.

Wednesday, April 2, 2014

Still more work to do on building approvals (updated)

The ABS building approvals for February were released today with commentary at the following links. Care must be taken again between seasonally adjusted and trend data when interpreting reports. The seasonally adjusted has been quite volatile in recent months.

Conus: Building Approvals trend still strong. Local data also stronger

Macrobusiness: Dwelling approvals retrace

The Conus Trend series (linked above) is showing annual increases of 30.6% for Cairns and 2.4% in Townsville. This should however be seen in the context that approvals in Cairns so far this FY still remain about half those of Townsville. The HTW Month in Review was also released today. While this is not updated for todays approval numbers it provides an interesting context.

Cairns building approvals have increased in trend terms by 47% between January 2013 and January 2014. While this is welcome news it is hardly boom times for the local construction industry given that the increase has come from such a low base. It really means that housing construction has recovered from 20% of 'normal’ to 30% over the past 12 months. Furthermore all of the increase thus far has been in house construction, apartment construction; is still non-existent.
I presume commentary here is mostly from Rick Carr who also posted his latest CairnsWatch last week. Housing approvals in Cairns remain skewed to the 'north' with over double the approvals in February compared to the 'south' (South also includes most of the central city area in the SA2 data).

 
Update: Pete Faulkner at Conus has taken issue with the HTW numbers with an updated post: More on Cairns building approvals

Although there is no doubt that approvals in Cairns are recovering from a low base, we would take issue with HTW's comment that we are now sitting at only 30% of normal. The most recent peak of approvals (back in late-2009/early 2010) saw trend approvals at a shade under 90 a month. We are presently therefore sitting at just over 50% of those levels.
There can sometimes be some curiosities at times in the HTW trends and I prefer to accept the Conus numbers. It could also come back to what period you are talking about to define "normal" and the chosen period can make a difference!

The pre-GFC construction boom was clearly one of overbuilding in Cairns unrelated to underlying economic activity rather than financially infused madness. Inclusion of that period, and depending on a starting date, will also inevitably skew outcomes.

Numbers relative to population and population growth may be a better guide. Rental trends suggest Cairns has been 'underbuilding' while Townsville and Mackay have been ''overbuilding' and continue to do so despite the underlying data?