Half yearly review of the Hunter economy including local and national insights presented at our March 2019 business breakfast in Newcastle

1. Presented by Dr Anthea Bill
Hunter Research Foundation Centre
1 MARCH 2019
HUNTER ECONOMIC
INDICATORS

2. • Macro: some uncertainty
• Local: robust for the short-term
• Housing market trends/ Investment
pipeline
• Regional outlook
PRESENTATION
OUTLINE

3. GDP GROWTH: UNDERWHELMING

4. -3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Mar-2000 Mar-2004 Mar-2008 Mar-2012 Mar-2016
% Change
Household Final Expenditure
Government Final Expenditure
PUBLIC EXPENDITURE:
CONTRIBUTION TO GDP
Source: ABS National Accounts.

5. International -
growth forecasts
downgraded;
more uncertainty
Household sector -
spending subdued
over longer-term
Coal -
weakened Chinese
import demand
OTHER MACRO TRENDS

6. DECEMBER 2018
HUNTER REGION
ECONOMY

7. LABOUR MARKET: GROWTH SLOWS
Mining CAPEX
Drops

8. UNEMPLOYMENT RATE

9. 0.0
2.0
4.0
6.0
8.0
10.0
12.0
Feb-1978 Feb-1983 Feb-1988 Feb-1993 Feb-1998 Feb-2003 Feb-2008 Feb-2013 Feb-2018
UNDEREMPLOYMENT NSW
Unemployment
Underemployment
Source: ABS, Labour Force Survey; NSW Seasonally Adjusted.
%

10. HOUSING PRICES: FLATLINED

11. 0
500
1,000
1,500
2,000
2,500
3,000
3,500
MAR 08 MAR 10 MAR 12 MAR 14 MAR 16 MAR 18
0
10,000
20,000
30,000
40,000
50,000
NSW
(RHS)
HUNTER
(LHS)
APPROVALS: GROWTH SLOWS
Source: ABS, Building Approvals.
New Houses Other (town houses, apartments etc.)
0
500
1,000
1,500
2,000
2,500
MAR 08 MAR 10 MAR 12 MAR 14 MAR 16 MAR 18
0
10,000
20,000
30,000
40,000
50,000
NSW (RHS)
HUNTER
(LHS)
Source: ABS, Building Approvals.

12. 0
500
1,000
1,500
2,000
2,500
Dec-02 Dec-05 Dec-08 Dec-11 Dec-14 Dec-17
Millions(Real$)
Residential
APPROVALS PIPELINE ($)
Source: ABS, Building Approvals, 4 quarter moving average.
*Real Values, HRF Calculation.
Non- Residential
Average last
2 years

13. PULSE SURVEYS
Phone
surveys
300
Households
300
Businesses

14. -0.10
-0.05
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
DEC 06 DEC 08 DEC 10 DEC 12 DEC 14 DEC 16 DEC 18
Business Confidence (Next 12 Months)
Performance (Last Three Months) *
BUSINESS PERFORMANCE:
REBOUND
SOURCE: HRF Centre Hunter Business Pulse Surveys
* Figure has been interpolated for June 2015
Capital
Expenditure
(Next 12 months)

15. MAIN CONSTRAINT:
ROBUST IN SHORT-TERM
* Figure has been interpolated for June 2015

16. CONSUMER SPENDING:
MODERATE IMPROVEMENT

17. CONSUMER SPENDING:
HAND-BRAKE
Source: ABS, National Accounts.
-4
-2
0
2
4
6
8
10
12
0
40
80
120
160
200
Mar-01 Mar-03 Mar-05 Mar-07 Mar-09 Mar-11 Mar-13 Mar-15 Mar-17
Household savings ratio
Household debt to
income ratio

18. REGIONAL OUTLOOK:
WEAKENING FROM 2017 HIGHS

19. • Labour market
• New housing approvals, especially apartments
• Business performance and confidence
• Short term consumer spending
• House prices flat-line
SUMMARY
• Capital expenditure and hiring intentions
• Long term consumer spending
• Regional outlook for households and businesses

20. THANK YOU
Hunter Region Economic Indicators - June 2018
Available as you leave today