Townsville residents and local businesses still reeling from Qld Nickel collapse
Since the collapse of the Yabulu nickel refinery in April 2016, Townsville’s unemployment rate has skyrocketed into double-digits with little suggesting the worst may be over.
Latest ABS data showed the Townsville region is experiencing the second highest unemployment rate in the state (11.3%), trailed only by Outback Queensland (11.4%).
While rising unemployment in Townsville began with the slowdown in the resources sector, the closure of the refinery owned by former Queensland politician Clive Palmer “added insult to injury”.
CCIQ Economist Steven Gosarevski believes Townsville’s unemployment rate is not only hurting residents, but the local businesses in the region as well.
“With SEQ unemployment sitting at 5.6 per cent, Townsville residents are twice as likely to find themselves unemployed than an average urban worker,” Mr Gosarevski said.
“Worse still, workers are discouraged. Participation levels in the work force have plummeted from 75 per cent in 2011 to under 60 per cent in March.
“When there’s less money circulating around the local economy because people simply don’t have money to spend, local businesses are losing out and this only exacerbates the issue.
“Businesses whose profits are declining will begin looking at how to keep their operations afloat and unfortunately more job losses may arise from this.”
The latest CCIQ Suncorp Pulse Survey of Business Conditions for the March quarter showed businesses in regional Queensland were more optimistic about the outlook for the Queensland economy than businesses in South East Queensland.
“Regionally located businesses noted a strengthened coal industry, a strong season for agriculture and the cyclone recovery works as factors behind the improved outlook,” Mr Gosarevski said.
“This is despite the divergence in unemployment levels between regional Queensland and South East Queensland, and in spite of South East Queensland continuing to enjoy more favourable business conditions relative to their regional counterparts.
However, Mr Gosarevski points out that isolated data from the Townsville region showed businesses do not share the same optimism as respondents from Queensland’s other northern regions.
“Respondents of the latest Pulse Survey from the Townsville region were extremely pessimistic about their economic outlook," he said.
One business owner said: “the economy has crashed in North Queensland, many people have left the region and businesses are closing."
“The local regional economy has contracted following the demise of Queensland Nickel. Those flow on effects coupled with no new jobs due to poor sentiment, means the market has become increasingly competitive with price gauging the easy option,” said another business owner.
Mr Gosarevski points to a number of positive factors, including Townsville escaping the wrath of Cyclone Debbie, but being close enough to assist with recovery works.
“Certainly there have been some other factors which have injected some optimism into the region, including the $250 million CBD stadium which is set to have at least 80 per cent of the value of the project to be spent on local subcontractors and suppliers.
“Furthermore, if the Adani project proceeds, Townsville is set to benefit from the hundreds of jobs that will come from the company establishing their regional headquarters in the city.”
However, Mr Gosarevski said that residents and local businesses aren’t convinced that these factors alone will be their saving grace.
“I think what residents and businesses want to see are long-term plans, implemented quickly, that address youth unemployment and diversify the economy so that employment remains stable through any possible ‘bust’.
“Putting all of our eggs into one basket, particularly if we’re talking about construction and mining exports, could lead to a lot of disappointment.
“Post-mine construction and capital investment, we know that employment levels drop off significantly as can be seen in the gas industry at present.
“Obviously it’s important to invest in these areas as there clearly are benefits in terms of royalties back to the state and from a broader national perspective.
“But what this region would rather see are job creating projects and initiatives that resonate with the average household and on the trade of local businesses.
“Hopefully the upcoming State Budget on June 13 will deliver a raft of positive news for Townsville and turn around the steep incline in unemployment that they have seen over the past five years.”