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Economic Outlook November 2009
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Economic Outlook November 2009

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    Economic Outlook November 2009 Economic Outlook November 2009 Presentation Transcript

    • p r a c sy s . Economic Outlook November 2009 Update Michael Chappell Director p r a c sy s .
    • Michael Chappell 2  Economist of 24 years experience  Founder and Director of Pracsys Economics  Research program on urban economics p r a c sy s .
    • Pracsys 3  Offices in Perth, Sydney, Brisbane  Policy advisor to government  Investment advice to commercial resource, commercial, resource retail, infrastructure companies www.innovation4cities.com.au www.pracsys.com.au www p r a c sy s .
    • Outline 4  What just happened?  What will happen next?  The good news  The bad news  The Joondalup news  Megatrends for cities p r a c sy s .
    • 5 Part 1 – Economic Update Nov 09 p r a c sy s .
    • Ok, so what just happened? 6 p r a c sy s .
    • Private & Public Sector Activity 7 A straight swap? Saving Spe d g Spending p r a c sy s .
    • Big Government Debt 8 p r a c sy s .
    • World Industrial Production 9 p r a c sy s .
    • Commodities 10 p r a c sy s .
    • 11 Part 2 – WA: the Lucky State p r a c sy s .
    • Some good things….. 12 Export markets rebounding…. p r a c sy s .
    • WA Commodity Prices 13 Commodity prices yp rising… p r a c sy s .
    • Inflation 14 Inflation falling… g p r a c sy s .
    • Wages 15 Labour costs ok… …but look p r a c sy s .
    • and other good things…. 16  Resource exploration increasing  Non-residential construction booming (federal and g( state infrastructure spend) p r a c sy s .
    • Some bad things…. 17  Residential property market stalled (due more to finance shortage than land shortage - project LVRs)  Home mortgages stretched (it ain’t 2007 anymore)  Financial services flat  Retail flat (rents down, savings up, unemployment up, residual pessimism) id l i i )  Banks have written off $13 billion bad debts p r a c sy s .
    • The Joondalup News 18  Retail/consumer services economy  Historical growth fuelled by residential construction g y  Small export economy  Underdone for strategic infrastructure U d d f t t i i f t t  Little knowledge infrastructure (smart growth?)  Big daily exodus of workers p r a c sy s .
    • The Joondalup News 19  Designated a Primary Centre  Focal point for future infrastructure investment p  Look to Commonwealth funding  Heaps of basic infrastructure investment (20 year H fb i i f t t i t t history & amenity potential)  Accessible to major employment centres p r a c sy s .
    • Quick Summary 20  Recovery will be patchy  Economic exposure to Asia positive p p  Still too much private debt  Banks B k gun-shy h  Retail and residential construction to remain weak for two-three years  Joondalup must position for strategic infrastructure p p g growth – more export and knowledge industries p r a c sy s .
    • Newsflash!! 21  Economists are fully employed www.innovation4cities.com.au www.pracsys.com.au www pracsys com au p r a c sy s .
    • 22 PART 2 – City Megatrends p r a c sy s .
    • Megatrends – Abundance to Scarcity 23  Food  Water  Transport  Energy gy  Finance p r a c sy s .
    • Food 24  Access t protein will shape cities i f t A to t i ill h iti in future  Protein comes from beef, pork, chicken ,p ,  Most feed for livestock comes from fishmeal  Fishmeal is nearly gone! Food Conversion Ratio Critical for cities: Beef 12:1 secure local food production Pork 8:1 c ose population us g close to popu at o using renewable inputs Chicken 6:1 (aquaculture, grains..) Fish 1:1 p r a c sy s . World Food Organisation, 2007
    • Water 25  Most drinking water goes on lower order uses  Reuse, recycle, repurpose  Innovation in decentralised capture storage and capture, use of water will reshape cities Critical for cities: Diversification of water sources improved sources, reuse across all user types and zero liquids discharge from industrial estates p r a c sy s .
    • Energy 26  Fossil fuels for power generation in decline  Decentralised power generation from renewables is rising – but peak load capacity is weak  We need better portable storage (eg: nonobatteries vs NiMeHi) and fixed storage (vanadium flow batteries) Critical for cities: power storage innovation has lagged (car companies?) and new efficient technologies are needed p r a c sy s .
    • Transport 27  Urban sprawl has separated people from city amenities and jobs (particularly smart jobs)  Car use has grown based on cheap fuel  Public transit systems work best serving dense urban agglomerations Critical for cities: private transport based on renewable energy and public transport serving dense, diverse activity centres p r a c sy s .