From Clayton COOK TP Human Capital, with Economist Colin Dwyer
The impact of a pandemic has seen the most unusual financial year in most people memories. It has disrupted a positive economic trend in Townsville up to March and then seen many local businesses adapt to new challenges and many workers routines and incomes have changed.
Townsville is in a solid position to recover quicker than many other regions, but recovery is likely to be gradual with some barriers along the way. Promisingly, Townsville region job levels rebounded solidly in May, with better participation rates but higher unemployment; especially males. Jobkeeper payment is probably a key contributor to this performance.
Townsville regions official monthly employed workforce levels improved by 7,500 over the month to 109,000, probably mostly due to JobKeeper. Interestingly Townsvilles employed workforce figure has also improved 1,500 compared to the same time last year, indicating solid annual workforce performance despite the recent pandemic conditions.
Townsville regions official monthly unemployment rate in May was 7.5%. This is slightly up from last month and worse than the monthly rate at the same time last year. Under current conditions, this is expected.
The regions monthly participation rate has improved to 63.3%, a five-point improvement on April performance and two-point improvement compared to the same time last year. The monthly performance is probably Jobkeeper related while the annual comparison is a reflection of a region that was creating jobs and performing better.
Townsville region is well-positioned to recover better than other regions from this current health-related downturn. As we approach the end of the financial year it's worthwhile looking back at a most unusual financial year with a rare event, some positive momentum and also look forward about what’s on Townsville’s horizon.
If we look at the regional performance over the past year, workforce levels have improved marginally and official unemployment is performing in an unsurprisingly unacceptable range. In the past year, multiple significant projects have commenced while other projects have been announced. These significant projects have diversity across different industries such as transport, Defence, Education, Manufacturing and Mining. They are in both private and public sectors and will create considerable operational jobs in the future. The stadium opened in February and held two fantastic events, creating substantial direct and indirect jobs. Business confidence was higher than at any time in the past three years. Then Covid-19 locked down consumer activity and Townsville region, like all other regions, has been underperforming. Economic and community recovery is probably going to be gradual with challenges and opportunities along the way.
Looking forward there’s strengths and weakness on Townsville’s horizon with the change expected in some areas of the local economy. A state election in October is likely to disrupt private investment but could present a public investment opportunity. JobKeeper is expected to be withdrawn or partially withdrawn after September and we expect disruption in retail, banking and some property subsectors leading into the end of the calendar year. With changes to delivery and course costs, we are pessimistic about local higher education jobs over the coming year. With pent-up demand, we are cautiously optimistic for better conditions in restaurants cafes and accommodation during 2021. We continue to be optimistic about significant road, mining, manufacturing and defence projects and with the federal government new building grants program, more positive about local residential construction.
We expect 2021 to be a stronger performing time than 2020 for jobs, but probably not a fully recovered local economy.
Clayton Cook 0417608090
Colin Dwyer 0420558786