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Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
Economic Outlook November 2009
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Economic Outlook November 2009

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  • 1. p r a c sy s . Economic Outlook November 2009 Update Michael Chappell Director p r a c sy s .
  • 2. 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 .
  • 3. 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 .
  • 4. 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. 5 Part 1 – Economic Update Nov 09 p r a c sy s .
  • 6. Ok, so what just happened? 6 p r a c sy s .
  • 7. Private & Public Sector Activity 7 A straight swap? Saving Spe d g Spending p r a c sy s .
  • 8. Big Government Debt 8 p r a c sy s .
  • 9. World Industrial Production 9 p r a c sy s .
  • 10. Commodities 10 p r a c sy s .
  • 11. 11 Part 2 – WA: the Lucky State p r a c sy s .
  • 12. Some good things….. 12 Export markets rebounding…. p r a c sy s .
  • 13. WA Commodity Prices 13 Commodity prices yp rising… p r a c sy s .
  • 14. Inflation 14 Inflation falling… g p r a c sy s .
  • 15. Wages 15 Labour costs ok… …but look p r a c sy s .
  • 16. and other good things…. 16  Resource exploration increasing  Non-residential construction booming (federal and g( state infrastructure spend) p r a c sy s .
  • 17. 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 .
  • 18. 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 .
  • 19. 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 .
  • 20. 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 .
  • 21. 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. 22 PART 2 – City Megatrends p r a c sy s .
  • 23. Megatrends – Abundance to Scarcity 23  Food  Water  Transport  Energy gy  Finance p r a c sy s .
  • 24. 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
  • 25. 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 .
  • 26. 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 .
  • 27. 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 .

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