Queensland Economic Advocacy Solutions

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Queensland's Domestic Economy - September Quarter 2018 Update

Latest ABS data confirms Queensland's domestic economic growth has now peaked and is falling away which has considerable implications for future employment growth in the Sunshine State.

In trend terms, our domestic economy grew by only 0.1 per cent in the September quarter and in seasonally adjusted terms it contracted by 0.4 per cent. This compares to 0.5 per cent growth and 0.3 per cent growth respectively for Australia's domestic economy.

Quarterly domestic economic growth for Queensland peaked in the December quarter 2017 following a strong two year period that generated considerable employment growth. However our domestic economic growth has progressively eased across 2018 which is now actively influencing our State's employment growth at present. In my opinion the absolute best lead indicator for employment growth in Queensland is State Final Demand.  

Despite moderate household and government consumption expenditure growth it was private capital expenditure that contracted heavily in the September quarter 2018 that has had a considerable negative impact on Queensland's domestic economic growth. No doubt the state of disarray in Canberra is to some extent causing many investment decisions to placed on hold.  This will unfortunately play out for at least another six months with the Coalition committing to run full-term and the next Federal election to be held in late May 2019.

​Finally next week sees both the Federal Government release its 'Mid-year Economic and Fiscal Outlook' and the Queensland Government release its 'Mid-year Fiscal and Economic Review'.  It will be interesting to see whether the Coalition makes any announcements ahead of the pulled forward - 2 April 2019 Federal Budget to try and get its floundering reelection stocks up.  In addition the Queensland Government, which rightly or wrongly has more accountability placed on it for the performance of the State economy, may be tempted to announce measures to get employment moving upwards again to drive down the Country's highest unemployment rate.  

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