MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES The Cairns Economy Recent Trends and Prospects WS (Bill) Cummings PRESENTATION TO Ref: J2776 22 July 2014
LAST YEAR S ADDRESS PROSPECTS FOR CAIRNS REGION S ECONOMY LOOKING BETTER THAN HAVE BEEN SINCE THE GLOBAL FINANCIAL CRISIS HIT FIVE YEARS AGO IN 2008. From address 23 rd of July 2013 2
IMPACTS ON THE REGIONAL ECONOMY I C Ex G INVESTMENT / CONSTRUCTION RISING MODESTLY HOUSEHOLD EXPENDITURE RATE RECOVERING OUTSIDE EARNINGS OVERALL UP MODESTLY GOVERNMENT EXPENDITURE DOWN 3
% GROWTH IN ROOM NIGHTS OCCUPIED HOTELS, MOTELS & SERVICED APARTMENTS 2004 2013 (1 st HALF) 8 6 4 2 0-2 -4-6 -8 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Cairns City Total TNQ Source: Australian Bureau of Statistics Cat No. 8635.3.55.001 4
Dec-11 GROWTH IN HOTEL, MOTEL ROOM NIGHTS DEC 2011 to APR 2014 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 % 20 16.7 16.1 15.7 10 12.8 12.1 9 8 7.8 8.1 6.8 6.4 4.8 4.9 5.6 4.8 5.1 5.8 5.2 5.8 5 3.9 4.6 9.5 0 0.9 0 0.9-2.1-3.5-3 -10 Source: Compass Research, TTNQ Tourism Monitor. 5
1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 NEW SERIES GROSS VALUE OF AGRICULTURAL PRODUCTION $M 1400 1200 1000 800 600 400 200 0 Source: Cummings Economics from ABS Agricultural Financial Statistics 7503.0. Note: Up to 2009/10 Far North Queensland Statistical Division : From 2010/11 includes part Carpentaria Shire 6
1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 VALUE OF MINING PRODUCTION FAR NORTH QUEENSLAND 1200 1000 800 600 400 200 0 Source: Cummings Economics from Queensland Mines & Energy data. FIFO to construction down : to operations & maintenance steady. PNG loss of Interoil office : sales in education & training, construction services and steel fabrication. 7
C HOUSEHOLD EXPENDITURE RATE RECOVERING 8
IMPACTS ON THE REGIONAL ECONOMY I C Ex G INVESTMENT / CONSTRUCTION RISING MODESTLY HOUSEHOLD EXPENDITURE RATE RECOVERING OUTSIDE EARNINGS OVERALL UP MODESTLY GOVERNMENT EXPENDITURE DOWN 9
VALUE OF BUILDING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION $M 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 1200 1000 800 600 400 200 0 (1) Note based on 11 months to end May 2014. Source: Cummings Economics from ABS data. (1) 10
1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 DWELLING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 (1) Note - based on 11 months to end May 2014. Source: Cummings Economics from ABS data. (1) 11
TOTAL VALUE OF BUILDING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION PRIVATE VS GOVERNMENT 1200 1000 800 600 400 200 0 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Private Government (1) (1) Note - based on 11 months to end May 2014. Source: Cummings Economics from ABS data. 12
Year 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 RESIDENTIAL POPULATION GROWTH : CAIRNS 0.06 0.05 0.04 0.03 0.02 0.01 0 (1) Cairns Statistical Subdivision from 2011. Cairns North & Cairns South SA3 from 2011. Source: Cummings Economics from ABS data. Cat No. 3218.0 and previous. 13
RESIDENTIAL POPULATION % GROWTH 10 YEARS 2002/03 TO 2012/13 ROCKHAMPTON SA3 20% MACKAY SA3 30% TOWNSVILLE SA3 28% CAIRNS SA3s 32% DARWIN SA4 26% Source: Cummings Economics from ABS Cat No. 3218.0. Growth Far North Queensland Region 46,000 (21%) 14
LOOKING FORWARD RISING INVESTMENT / CONSTRUCTION STARTING POINT: DWELLING VACANCIES LOW : RENTS UP HOTEL MOTEL OCCUPANCY RATES BACK UP 15
SOME PROPOSED DEVELOPMENTS IN THE PIPELINE INCLUDE CAIRNS CITY RESIDENTIAL CAIRNS NORTH 6 residential towers, 1 corporate, 1100 apartments over time 2 x 15 storey towers / residential development 15 storey commercial / residential development TOURISM 400 hotel rooms 300 bed backpacker hostel The Aquarium Project NORTH SIDE Bluewater expansion A retirement village 200-500 house lots Residential units SOUTHSIDE Towards 2000 house lots 16
GROWTH IN CHINESE INCOME LEVELS YEARS GDP US $ TRILLION GDP PER CAPITA (INT $ PPP) 2002 1.45 2,891 2003 1.64 3,227 2004 1.93 3,625 2005 2.26 4,115 2006 2.71 4,759 2007 3.50 5,562 2008 4.52 6,201 2009 4.99 6,798 2010 5.93 7,571 2011 7.33 8,411 2012 8.23 9,185 Source: United Nations. 17
GROWTH IN CHINESE OUTBOUND VISITOR NUMBERS No. M ANNUAL GROWTH 2006 35M 2007 41M 18.6% 2008 46M 11.9% 2009 48M 4.0% (GFC) 2010 57M 20.4% 2011 70M 22.4% TOTAL INCREASE 36 m 15.3% AV % PA (1) Note: Includes travel to Hong Kong, Macau & Taiwan. Source: Travel China Guide. 18
GROWTH IN CHINESE VISITORS CAIRNS AUSTRALIA 2000 6,682 106,807 2001 14,936 145,134 2002 10,789 168,032 2003 11,970 161,116 2004 26,360 227,394 2005 33,325 268,442 2006 34,184 289,779 2007 55,276 329,813 2008 47,022 347,319 2009 38,503 343,821 2010 62,734 408,327 2011 73,757 490,427 2012 102,075 573,071 AV. ANNUAL GROWTH 26% PA 15% PA Source: Tourism Research Australia International Visitor Survey. 19
COMPARISON PROJECTED AQUIS PROJECT WITH PERIOD 1984 TO 1996 INCREASE IN HOTEL MOTEL ROOMS FNQ ACTUAL 1984-1996 PROJECTED AQUIS 2015-2027 NO. OF ROOMS AT BEGINNING 2717 10800 AT END 12 YEARS 9010 6500 INCREASE 6293 6500 % INCREASE +232% +60% INCREASE : 4 YEARS 1986-1990 AQUIS STAGE 1 NO. 4259 3500 GROWTH +147% +32% 20
YEARS IN WHICH RATIO OF DWELLING APPROVALS TO POPULATION WAS ABOVE INDICATED DEMAND FOR DWELLING CONSTRUCTION, TO CURRENT POPULATION STIMULATED BY AQUIS POPULATION CITY 70,000 REGION 154,000 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 CITY 160,000 REGION 280,000 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 AQUIS 21
POPULATION INCREASES : CAIRNS CITY ACTUAL 1984-1996 AQUIS PROJECTED 2015-2027 POPULATION AT START 70,000 160,000 INCREASE 40,000 80-90,000 POPULATION AT END 110,000 240-250,000 % INCREASE +57% +50-56% 22
BACK TO MID TO LATE 1980s SOME TRANSITORY STRESSES AND STRAINS BUT BETTER KNOWN IN ADVANCE TO PLAN FOR AND RESPOND TO 23
COMMONWEALTH WHITE PAPER PROCESS LIFE EXPECTANCIES URBAN POPULATION GROWTH HISTORICAL DEVELOPMENT AND PROSPECTS 24
AGRICULTURAL POTENTIAL REGIONAL ROADS SEAPORT UPGRADING & CONTAINER SERVICES AIR FREIGHT OPPORTUNITIES HEALTH, UNIVERSITY, COMMUNITY SERVICES AND FACILITIES 25
MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES The Cairns Economy Recent Trends and Prospects www.cummings.net.au