Two speed economy but market outlook remains positive in Queensland according to Queensland Treasurer and business leaders at today’s BDO annual breakfast event
06 September 2016
The notion of a two-speed economy in Queensland was presented by Queensland Treasurer, Curtis Pitt MP, this morning at BDO’s annual Economic & Political Update breakfast attended by more than 300 Queensland business leaders.
Treasurer Pitt said as Queensland transitioned from previously high levels of resources sector driven investments and growth it was experiencing a two-speed scenario with strong activity and investment in South-East Queensland and a slower economy in some regional areas.
The Treasurer said traditional strengths such as tourism, education and health would continue to be important sectors in boosting the Queensland economy, however in the post-resources boom transition a renewed focus on innovation and infrastructure projects in new industry areas was needed to boost investment in regional areas.
The new bio-fuel plant in Gladstone was cited as one such potential investment project with the US navy making a commitment to convert its fleet to use bio fuels and looking for a refuelling facility in the Asia Pacific, and the Gladstone bio-fuel plant being well positioned to service this need - generating investment and jobs in Queensland.
BDO in Brisbane’s Managing Partner, Tony Schiffmann, commented that it was encouraging to see indicators of strength in a number of key market sectors:
- Agriculture – good conditions and strengths in certain markets such as beef cattle, but mixed commodity prices
- Bulk resource commodities – prices higher than expected – eg met coal prices
- Property and development – foreign investors are still active and low interest rates continue to see demand for residential property, particularly in South-East Queensland
- State infrastructure activity – Commonwealth Games led project, Logan Motorway enhancement project, Gladstone bio-fuel plant to list a few
- Tourism – visitor numbers from China are strong and growth forecasts significant. Globally there is a view that Queensland is a safe tourist destination.
“This morning’s discussion highlighted that whilst businesses in Queensland are confident of their own future there is an element of watch-and-see amongst the business community in terms of the economy.
“In addition, infrastructure requirements will clearly become increasingly crucial as the State continues down the path of a transitioning economy, and the concept of asset recycling is a complex one that will no doubt remain on the table for some time to come.
“Given the insights shared by our panel experts today, I think business in Queensland should move forward with confidence that the investment and outlook for the economy is overall quite positive. Business conditions are definitely improving and so any disconnect between business success and perception of weak economy should ease off soon.” said BDO’s Mr Schiffmann.
BDO undertook a Twitter poll to determine public opinion on the strength of the economy. People were asked: Is now the time to ramp up investment given record low interest rates?
At the time of going to press, respondents voted:
53% - yes, definitely / 38% - yes, with caution / 9% - no.