Economic Outlook Townsville & North West Queensland - Regional Development Australia ...
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ISSUE 1 QUART ERL Y UP D ATE 0 2/20 21
Townsville
& North West
Queensland
Economic
Outlook
1. Outlook February 2021
1.1 M ACROECONOMIC OUTLOOK
Entering 2021 the global economic The Australian dollar has The outlook is expected to continue
outlook continues to be dominated appreciated strongly along with to improve through early 2021.
by the COVID-19 pandemic. The virus key commodity prices including However, recent COVID outbreaks
and measures implemented to coal and iron ore as a result of in the New South Wales Northern
control its spread have resulted in the improved sentiment. However, Beaches area and Greater Brisbane’s
a severe global recession, with GDP ongoing trade tensions with China precautionary lockdown are timely
shrinking by 4.4% from the previous continue to cloud the outlook for reminders of the risks still facing the
year (IMF, 2020). The outlook remains Australia’s major resource and Australian economy.
highly uncertain, with rising infection agricultural exports. The longer term implications of
rates in the United States and Europe the pandemic are less clear. The
weighing against promising progress The domestic economy bounced significant public debts and deficits
towards a vaccine in the first half of back in the second half of 2020, with generated to fight the pandemic
2021. Ongoing political unrest in the will likely lead to future reductions in
US post the presidential elections GDP growing by 3.3% expenditure and potential increases
further clouds the economic outlook. in the September Quarter as COVID in taxation. Key industries such as
Equity markets have recovered restrictions eased. international tourism will almost
strongly to new highs despite the certainly take years to recover from
downturn, driven by the impending Unemployment edged lower to 6.6% the downturn.
vaccine development and record in December as the nation continues The risk of future pandemic
low interest rates which have to gradually transition from the outbreaks will also need to be
moved capital into higher yielding Jobkeeper and Jobseeker subsidy factored into both business
assets. Emergency global monetary programs which have served to planning and public policy given
policy is likely to continue for some boost expenditure and confidence the significant integration of global
time, as inflation remains low throughout the pandemic. supply chains.
to negative globally.
A JOINT INITIATIVE BY REGIONAL ECONOMIC ADVISORY AND REGIONAL
DEVELOPMENT AUSTRALIA TOWNSVILLE AND NORTH WEST QUEENSLAND.
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TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 1
Economic Outlook, please subscribe here.
1.2 REGIONAL OUTLOOK
The Townsville and North West The regional property market The ACCC has released its Northern
Queensland economy benefited has also experienced a recent Australian Insurance Inquiry Final
from the rising commodity prices Report and while this focus on
resurgence, with limited rental
and reopening of Queensland’s the issues has been welcomed,
State borders at the end of 2020. vacancy, record low interest there are concerns that the
While the region has experienced rates, and improved borrowing recommendations do not go
minimal direct COVID cases, the conditions combining to drive far enough.
border closures and restrictions As with the national economy, the
increased transaction activity
on business operations has had a region remains vulnerable to any
devastating impact on a number and rental/ price growth across
further COVID outbreaks. Ongoing
of industries. many parts of Townsville and North trade relations with China will
The tourism sector, including West Queensland. need to be monitored for their
aviation and hospitality as well as implications on the key mining and
international education have been Despite the improving outlook, agricultural export sectors as well as
particularly hard hit. However key the availability and affordability broad business confidence.
regional sectors including mining, of insurance for businesses and
agriculture, health care and parts households in the region is an
of the retail sector were able to escalating issue and has the
continue operations, with some potential to derail the economic
sectors experiencing increased recovery. Strata titled units and
demand due to the pandemic. leisure/recreational businesses have
been particularly impacted, with
Sectors such as seasonal
rapidly escalating premiums and a
horticulture and re-opening
highly limited pool of insurers willing
hospitality businesses have reported
to service the region.
difficulty in securing workers, with
regional employers forced to
compete with both the increased
Jobseeker subsidy and the absence
of seasonal international labour.
Mornington
Carpentaria
Doomadgee
Burke
TOWNSVILLE & Hinchinbrook
Palm Island
NORTH WEST QUEENSLAND Townsville
Townsville
REGIONS
Burdekin
Mount Isa
Charters Towers
North Queensland
McKinlay Richmond
Mid-West Queensland Cloncurry
Flinders
Western Queensland
Total 2018-19 GRP for Townsville Boulia
& North West Queensland
is $16.9 billion
-1.1% annual growth
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 2
2. Key Indicators and Regional Development News
2.1 NORTH QUEENSLAND
Indicator Townsville Hinchinbrook Burdekin Palm Island Charters Towers
Gross Regional Product
$10.2 B $509 M $1.03 B $42 M $ 680 M
(GRP) (2018-19)
-0.8% -6.2% -4.0% -7.6% -1.1%
Annual Growth Rate
7.1% 8.1% 6.5% 54.9% 8.7%
Unemployment -0.2 -0.3 -0.2 -3.1% -0.5
(June Qtr. 2020) ppt quarterly ppt quarterly ppt quarterly ppt quarterly ppt quarterly
decline decline decline decline decline
Median $320,00 $214,000 $165,000 $190,000
House Price 3.2% 7.0% -0.6% NA -5.0%
annual annual annual annual
(2019-20) increase increase decline decline
195,032 10,687 16,971 2,671 11,739
Population 0.5% -1.1% -0.6% 1.29% -0.9%
(June 2019) annual annual annual annual annual
growth decline decline growth decline
Table 2.1: Headline Economic Statistics North Queensland Source: NIEIR (2020), QGSO (2020)
OUTLOOK REGIONAL DEVELOPMENTS previous stages developed at The
Stand and John Brewer Reef. MOUA
The North Queensland economy Works are set to begin on the Big
will serve as a key driver to support
has begun to pick up momentum Rocks Weir project north of Charters
the recovery of visitation to North
in late 2020. Unemployment has Towers with the Australian and
Queensland post-COVID-19, with the
come down slightly across the Queensland governments each
potential to generate up to 50,000
region and building approvals committing $30 million towards
visitors per annum and contribute
in Townsville have increased the development.
$22.5 million to GRP.
dramatically in recent months, The weir will provide an estimated
albeit from a very low base. The opportunity for a regional
10,000 megalitres of water
hydrogen industry has continued
A strong pipeline of projects allocations per annum for urban
to gather momentum with Origin
is expected to see improved and agricultural use supporting
Energy announcing plans for a
economic performance continue $35 million per annum in increased
300MW electrolyser in Townsville with
through 2021. Economic risks agricultural production. The
aims to produce 36,000 tonnes of
remain, including further fallout project forms stage one of the
green hydrogen a year for export.
from COVID-19 and low projected proposed $5 billion Hells Gates
future prices for the region’s key The Queensland Government
Irrigation Scheme.
sugar industry. has identified Townsville as a key
North Queensland’s Museum
gateway for hydrogen production,
of Underwater Art (MOUA) is
and has committed a further $10
on schedule to be completed million over the next four years to
during 2021 following a commitment support the industry’s development.
to the final $1 million funding by the The State’s initial $5 million in
State Government. funding for the region will be used
The final installations to be located by local zinc manufacturer Sun
at Magnetic and Palm Islands will Metals to develop the region’s first
complete the experience alongside renewable hydrogen facility.
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 3
2.2 MID-WEST QUEENSLAND
Indicator Flinders Richmond McKinlay
Gross Regional Product
$157 M $78 M $675 M
(GRP) (2018-19)
-4.6% -2.4% 9.1%
Annual Growth Rate
Median $80,000 $95,000
$90,000
House Price 23.1% -5.0% annual change
annual annual N/A
(2019-20) increase decline
1,505 810 818
Population 0.5% -0.5% -0.5%
(June 2019) annual annual annual
growth decline decline
OUTLOOK Table 2.2: Headline Economic Statistics Mid-West Queensland
Source: NIEIR (2020), QGSO (2020)
Economic conditions in Mid-West
Queensland have remained REGIONAL DEVELOPMENTS The Richmond Agriculture Project
steady as key indicators have is a $210 million project aiming to
Works have continued towards
shown mixed results. irrigate 8,000 ha for broadacre
developing major regional irrigated
While unemployment statistics cropping. The proposal would
agricultural developments across
are not gathered consistently for support 55 ongoing FTE jobs on
the Mid-West, including:
these local government areas the border of the Richmond and
The 15 Mile Irrigation Project
individually, the Mid West region’s McKinlay Shires, using existing
northwest of Hughenden has been
unemployment is currently infrastructure to transport produce.
approved and aims to provide water
estimated at a very low 3%. Mineral Resources Grants of up
to 300ha of high value agricultural
The housing market has had to $200,000 were approved by
land. Once completed the project is
significant variation in results the Queensland Government
expected to create 165 ongoing jobs
which were impacted by the in 2020 to explore possible new
for the region.
typically low sales volumes. resource sites in a number of areas
The Hughenden Irrigation
The return to modest population across the West and Mid-West.
Project (HIPCo): Works continue on
growth in Richmond and Flinders The $200,000 grants will be used
the detailed business case for the
is a significant milestone, given to employ an electromagnetic
$300 million + project which plans to
the long-term trend of population survey to identify base metal
provide 30,000 megalitres of water
decline. A number of small and deposits. Key opportunities include
allocations to irrigate over 2000 ha
large developments including the new gold deposits in McKinlay
of agricultural land. The scheme
Kennedy Energy Park, Hughenden Shire. The exploration could see
will support high value perennial
Recreational Lake, and the Viper continued recovery and growth in
crops such as citrus and mangoes
polyethylene pipe manufacturing the mining sector, which supported
alongside fodder crops to intensify
facility have helped support the local economy through the
the regional beef cattle industry.
growth and improved sentiment COVID downturn.
The project has the potential to
in the region.
grow the regional economy by
Major irrigation, meat processing,
$72 million per annum and support
and mining projects proposed
490 ongoing jobs.
for the region have the potential
to be game changing over the
coming years.
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 4
2.3 WESTERN QUEENSLAND
Indicator Cloncurry Mount Isa Boulia Burke Doomadgee Mornington Carpentaria
Gross Regional Product
$1.1 B $2.13 B $29 M $21 M $27 M $34 M $114 M
(GRP) (2018-19)
-1.6% -1.2% -3.5% -3.19% -9.6% -11.3% -6.3%
Annual Growth Rate
5.0% 6.9% 2.3% 22.6% 22.4% 22.3% 22.4%
Unemployment -0.6% -0.8% 0 -3.6% -3.7% -3.7% -3.7%
(June Qtr. 2020) ppt ppt ppt ppt ppt ppt ppt
quarterly quarterly quarterly quarterly quarterly quarterly quarterly
decline decline change decline decline decline decline
Median $120,000 $190,000
-29.4% $250,000 NA NA NA NA -9.5%
House Price
annual no change no change no change no change no change quarterly
(2019-20) decline decline
3,047 18,595 423 354 1,526 1,230 1.977
Population
-1.4% -1.5% -0.47% 0.6% 0.5% 1% -0.15
(June 2019) annual annual annual annual annual annual quarterly
decline decline decline growth growth growth growth
Table 2.3: Headline Economic Statistics North West Queensland Source: NIEIR (2020), QGSO (2020)
OUTLOOK
The outlook for Western
Queensland regions remained
steady entering 2021, with
generally lower unemployment
offset by weakness in GRP and
ongoing population decline in the
region’s largest centres (Mount
Isa and Cloncurry). Despite the
labour market improvements,
REGIONAL DEVELOPMENTS
local unemployment remains
a major concern at above 20% The CopperString 2.0 project has continued to progress with the draft
for the remote communities of Environmental Impact Statement released for public consultation and a
Burke, Doomadgee, Mornington further commitment of $11 million from the Australian government to fast
and Carpentaria. track the project.
The recovery in key base metals The $1.5 billion transmission line aims to connect the community of Mount
prices at the end of 2020 has Isa and the North West Minerals Province to the National Electricity Grid.
helped to strengthen the regional Economic modelling estimates 3,500 regional jobs and $79 billion in
outlook entering 2021. economic activity will be created over 30 years due to additional resource
projects made viable through lower electricity costs.
A final investment decision for CopperString 2.0 is expected during 2021.
Grand Central Industries are continuing to progress the Cloncurry
Intermodal Terminal. The project is shovel ready and finalising project
finance. The debottlenecking rail infrastructure will increase the capacity of
the Great Northern Rail Line by up to 4 million tonnes per annum and provide
greater rail access for junior miners.
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 5
3. Business Confidence
Confidence in Queensland’s OVERALL QUEENSLAND Political and economic stability, as
12 month outlook significantly BUSINESSES REPORTED well as the level of demand remain
improved in the September IMPROVEMENTS IN: the most significant concerns
quarter (+8.3ppt), as the state • Sales and revenues (+15.5ppt) (particularly for small businesses)
economy continues its recovery across the state.
• Profitability (+7.8ppt)
from COVID-19.
• Operating costs (+7.4ppt)
While there is increased optimism
Positive results were also reported
for the coming quarters, caution in regard to labour costs and
remains due to the recent employments levels, which was
domestic outbreaks of COVID 19 driven largely by a decrease in
and the impending finalisation the Jobseeker supplement and
of the Jobkeeper and Jobseeker the reopening of the domestic
subsidy programs. Queensland economy.
Indicator Index Sep 2020 Quarterly Change
12 Month Outlook Queensland 33.3 +8.3
General Business Conditions 40.1 +9.7
Sales and Revenue 45.9 +15.5
Labour Costs 51.6 +8.1
Profitability 38.2 +7.8
Employment 45.4 +6.1
Capital Expenditure 43.6 +3
Table 3.1: Queensland Business Confidence Sep 2020 Source: CCIQ (2020) Image credit: Cam Laird
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 6
4. Industry Profile: Agriculture Forestry & Fishing
Each Quarter the Townsville and The outlook varies significantly The Townsville and North West
North West Queensland Economic between commodities. The Queensland region hosts a number
Outlook profiles a key regional region’s traditional sugar crop of proposed major agricultural
industry sector. This quarter reviews has been impacted by stagnating developments. Key current
the Agriculture, Forestry and global demand due to increasing opportunities under investigation
Fishing industry. health concerns associated with as identified in the Townsville and
excess consumption. Beef on the North West Queensland Economic
INDUSTRY OVERVIEW other hand has continued to see Recovery and Growth Strategy
The Agriculture, Forestry and Fishing strong demand and price growth, (2020-2030) are summarised in the
industry is a major economic predominantly driven by changing table below.
sector in Townsville and North West consumer preferences in Asia. Local Combined the economic impact
Queensland, contributing $867 horticultural production continues of these projects could be game
million to GRP (5.1%) in 2018-19 and to be constrained by the limits of changing for the region. If all
supporting over 4,500 regional jobs. domestic demand and increasing projects were to go ahead they
North Queensland (specifically export access will be key to realising would be estimated to create
Burdekin and Hinchinbrook) is one future growth. up to 20,000 Full Time Equivalent
of Australia’s most productive Despite these macro trends, all (FTE) jobs during construction and
sugarcane regions alongside of Townsville and North West contribute nearly $4 billion dollars
diversified broadacre cropping Queensland’s major agricultural to GRP (including direct and flow on
(cotton, legumes). North Queensland industries have experienced construction impacts).
also hosts a notable aquaculture significant periods of growth and Potential ongoing impacts from
industry including black tiger decline in recent years (see Figure increased agricultural output total
prawns, redclaw crayfish, 4.1). The fluctuations which are approximately 5,000 direct and
barramundi, and cobia. common to the industry have 2,000 indirect jobs and $1.1 billion p.a.
The Mid-West and Western regions been driven by weather events in GRP (direct and flow on).
currently specialise in extensive (including the 2019 floods which
cattle grazing. saw approximately 500,000 head
of cattle lost across the region) and 50.0%
The industry also supports a
market fluctuations. 40.0%
significant value add manufacturing 50.0%
sector, including six regional sugar 50.0%
40.0%
30.0%
Annual Value Add Growth (%)
mills and the 1,800 head per day JBS 50.0%
40.0%
30.0%
20.0%
Townsville Meatworks.
Annual Value Add Growth (%)
40.0% 10.0%
20.0%
30.0%
30.0% 0.0%
Annual Value Add Growth (%)
OUTLOOK 20.0%
10.0%
2016/17 2017/18 2018/19 20
Annual Value Add Growth (%)
20.0% -10.0%
The Agriculture, Forestry and Fishing 10.0%
0.0%
2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
10.0% -20.0%
industry has seen significant 0.0%
-10.0%
2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/
investment interest over recent 0.0%
-10.0%
-20.0%
-30.0%
2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25
years, with rising incomes in -10.0%
-30.0%
-40.0%
-20.0%
emerging market economies -20.0%
Sugar Cane Growing O
-40.0% Beef Cattle Farming A
and a growing global population -30.0%
Sugar Cane Growing Outdoor Vegetabl e Growing In
-30.0%
driving demand for high quality -40.0% Beef Cattle Farming Aquaculture
-40.0% Sugar Cane Growing Outdoor Vegetabl e Growing Indoor V egetable Growing
agricultural produce.
Sugar Cane Growing Outdoor Vegetabl eBeef Cattle Farming
Growing Aquaculture
Indoor V egetable Growing
Beef Cattle Farming Aquaculture
Figure 4.1: Historical and Projected Industry Growth Source: IBISWorld (2021)
TOWNSVILLE & NORTH WEST QUEENSLAND ECONOMIC OUTLOOK 7
Project Description Proponent Status Capex
140,000 ML dam and distribution network Detailed Business
Cave Hill Dam MITEZ $460 million
supporting irrigated agriculture. Case Completed
Unlocking an additional 150,000 ML per Detailed Business $358 - $665 million,
Burdekin Falls
annum of water allocations for agricultural SunWater Case Under depending on the
Dam Raising
irrigation, mining and urban use. Investigation final height
Awaiting
Richmond Irrigated Richmond
8,000 ha irrigated agricultural project. Confirmation of $210 million
Agriculture Project Shire Council
Water Allocations
Irrigated agriculture and urban
Charters Towers
Big Rocks Weir water storage for the Township of Funding Committed $60 million
Regional Council
Charters Towers.
Townsville Detailed Business
Hells Gates Dam 50,000 ha long-term irrigation scheme. Enterprise Case Under $5.5 billion
Limited Investigation
10,000 ha irrigated agricultural Final Stages of
HIPCo Irrigated
development for hay, fodder and high HIPCo Design and Business $300 million
Agriculture Project
value food crops. Case Underway
918 hectare irrigated agriculture precinct
15 Mile Irrigated Flinders Shire Stage 1 Development
growing high value table grapes and $47 million
Agriculture Project Council Approved
citrus crops.
Hughenden Feedlot 50,000 head feedlot and 800-15,000 head/ CVNM Development
$100 million
and Abattoir day abattoir. Investments Approved
Table 4.1: Proposed Agricultural Developments Source: RDA (2020)
For Further Information
The Regional Development Australia Regional Economic Advisory (REA)
Townsville and North West Queensland provides specialised economic
(RDA) Committee is pleased to partner consultancy services to the
with Regional Economic Advisory on this communities of Central, Northern, North
initiative to provide a quarterly update West, and Far North Queensland.
on the region’s Economic Outlook. REA is passionate about unearthing
For more information on investment and new, evidence-based opportunities that
Cr Frank Beveridge growth opportunities within our region, Mr Matthew Kelly help regional centres prosper long into
Chairman please don’t hesitate to contact RDA Principal Economist
the future.
CEO Ms Glenys Schuntner.
Regional Development Australia Regional Economic Advisory
Townsville and North West 07 4767 7234 / 0417 790 016
Queensland Inc. matthew.kelly@regionaladvisory.com.au
07 4410 3655 regionaladvisory.com.au
ceo@rdanwq.org.au Level 1, 33 Palmer Street
rdanwq.org.au South Townsville QLD 4810
Level 1, Enterprise House
6 The Strand, Townsville QLD 4810
All care and diligence has been exercised in the preparation of this report. Forecasts
To receive future copies of the or projections developed as part of the analysis are based on adopted assumptions
and can be affected by unforeseen variables. Consequently, Regional Economic
quarterly Economic Outlook, Advisory gives no warranty that a particular outcome will result and the authors
please subscribe here. accept no responsibility for any loss or damage that may be suffered as a result of
reliance on this information.
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