Cummings
Economics
The Cairns Economy
Recent Movements and Short-Term Prospects
Presentation to the
Cairns Chamber of Commerce Luncheon
August 2007
Bill Cummings - Principal
 Cummings Economics
 Compass Research
 North Australia Research Group
Cummings Economics
Ph 4031 2888 Fax 4031 1108
Email: [email protected]
Web: www.cummings.net.au
The past year has more than
met expectations of continuing
strong growth predicted in last
year’s review.
The Cairns Economy
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August 2007
Population - Growth
Growth on Previous Year, Cairns Region
(Estimated Residential)
Cairns
3.5%
3.3%
%
Cairns Region
1.4%
1.9%
2.3%
2.3%
1.4%
2000
1.5%
1.5%
1999
0.5%
0.5%
0.8%
0.9%
1.3%
1.0%
1.0%
0.9%
1.5%
1.4%
1.2%
2.0%
1.7%
1.5%
2.5%
1.7%
2.3%
3.0%
0.0%
1997
1998
Source : ABS.
2001
2002
2003
2004
2005
2006
The Cairns Economy
www.cummings.net.au
August 2007
Long-Term Projections of
Residential Population Growth
Cairns City 2001-2006
Government Projections
Low
1.5% pa
Medium
1.8% pa
High
2.1% pa
Actual Long-Term
1976 – 2004
2.9% pa
Actual 2001 – 2006
from Census Data
2.5% pa
The Cairns Economy
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August 2007
Aggregate ‘Real’ Taxable Incomes
%
Cairns Region
9.2%
7.8%
Cairns City LGA
13%
10%
Asian Crisis Impact
GST Impact
4.8%
4.1%
4.1%
4.0%
0.5%
0.7%
0.8%
2.6%
2.6%
-0.1%
1%
-2%
-5%
1996/97
1997/98
1998/99
Source : BTRE & ATO.
1999/00
-3.0%
-3.7%
4%
1.4%
1.6%
7%
8.6%
12.4%
Growth – Cairns Region
2000/01
2001/02
2002/03
2003/04
(p)
2004/05
The Cairns Economy
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August 2007
0
1980/81
1981/82
1982/83
1983/84
1984/85
1985/86
1986/87
1987/88
1988/89
1989/90
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
Value of Building Approvals
Far North Qld Statistical Division
1200
1000
800
$M
600
400
200
Source : ABS.
The Cairns Economy
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August 2007
Dwelling Approvals
Far North Statistical Division
No.
4500
4000
3500
3000
2500
2000
1500
1000
500
0
87/88 89/90 91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06
The Cairns Economy
Source : Cummings Economics from ABS data.
Cummings Economics
August 2007
0.0%
1976/77
1977/78
1978/79
1979/80
1980/81
1981/82
1982/83
1983/84
1984/85
1985/86
1986/87
1987/88
1988/89
1989/90
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
Population Growth Rates – Cairns
1976/77 to 2005/06
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Source : ABS
The Cairns Economy
Cummings Economics
August 2007
Cairns Airport – Domestic & International Terminals
Total Arriving & Departing Passengers
% Increase on same month Previous Year
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugSep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
2006
Source : CPA
2007
The Cairns Economy
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August 2007
Growth in Room Nights – Hotels/Motels
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
(1)
-4.0%
(1) First 3 quarters.
Source : ABS.
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
-6.0%
The Cairns Economy
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August 2007
Cyclone Impact Nett Stimulatory
to Economic Activity
Est Loss of Income:
Crops
$470 m
Est Infusion of Funds:
Insurance Claims
Cyclone Relief
$420 m
$350 m
$770 m
The Cairns Economy
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August 2007
Sugar Prices
US/Cents
per lb*
18
15.8
16
14
12
11.5
10.5
9.5
10
8
6
4
2
0
2004
2005
2006
2007#
# projected
Source : ABARE
The Cairns Economy
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August 2007
Beef Prices
Source : ABARE
The Cairns Economy
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August 2007
 FISHING IMPORTANT PART OF
OUTSIDE EARNINGS
 MINING INCOME RISING
The Cairns Economy
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August 2007
 GROWING OUTSIDE EARNINGS
OF SERVICE INDUSTRIES
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August 2007
The Cairns Economy
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August 2007
Expanding Outside Earnings
 AVIATION & MARITIME SERVICING
 BUSINESS SERVICES
 CREATIVE INDUSTRIES
The Cairns Economy
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August 2007
Major Development Projects by Area
March Quarter 2007
$ bn
2.5 $2.2 bn
Total $10.3 bn
$1.9 bn
2
$1.6 bn
$1.4 bn
1.5
$1.2 bn
$0.9 bn
1
$0.6 bn $0.5 bn
0.5
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The Cairns Economy
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August 2007
 Will the problems on “WALL ST”
translate to “MAIN ST’ USA?
 If YES, How much would it affect a
growing world economy?
The Cairns Economy
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August 2007
 HIGHER INTEREST RATES
 LESS “CARRY TRADE” FINANCE
 MORE CAUTIOUS ATTITUDES TO
INVESTMENT
 STEADYING EFFECT ON PROPERTY
PRICES
The Cairns Economy
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August 2007
Housing Affordability – Cairns
Repayments as % of Income
60.0%
50.0%
40.0%
30.0%
20.0%
(1)
10.0%
Source : Cummings Economics & B Jacobsen
based on data from RBA, ABS, RP data.
The Cairns Economy
www.cummings.net.au
August 2007
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0.0%
Australian Exchange Rates
Aust $ / US $
¢
90
88¢
88
85¢
86
84
81¢
82
80
82¢
79¢
79¢
78
Source : RBA
24-Aug
17-Aug
25-Jul
1-Jul
1-Jan
74
1-Apr
76
The Cairns Economy
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August 2007
5-Year Zinc Price
The Cairns Economy
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August 2007
Tourism






Lacklustre Growth
Growth in Domestic Market
Falls in Some International Markets
High Dollar, Loss of Air Services
Rises in Domestic Airfares
Australians Travelling Overseas
The Cairns Economy
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August 2007
Source : BTRE
The Cairns Economy
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August 2007
New Generation of Aircraft in 2008
Boeing Dreamliners
Airbus A380
The Cairns Economy
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August 2007
Climate Change Policies
 Cropping for Biofuels
 Carbon Sequestration
 Interest in North’s Water Resources
 Non-Carbon Fuel Generation
The Cairns Economy
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August 2007
Source : Cummings Economics, Aug 2007
The Cairns Economy ww.cummings.net.au August 2007
Cairns Region Leads Northern Region
in Sales to the Rest of Australia as
Opposed to Sales to Overseas
 Domestic Tourism
 Agricultural Products
 Fishing Industry Products
 Mineral Products
 Aviation & Marine Services
 Business Services
 Creative Industries
The Cairns Economy
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August 2007
Population – Comparative Size
Comparative Populations – Northern Australia
Census Count 2006
Regional Stat Div
264,676
City
203,797
143,439
69,965
100,000
72,685
150,000
148,412
200,000
117,332
164,072
196,631
250,000
217,093
300,000
50,000
0
Mackay Qld
Rockhampton Qld
Source : ABS Census data
Darwin NT
Townsville Qld
Cairns Qld
The Cairns Economy
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August 2007
 SOME NEGATIVES AND
UNCERTAINTITIES AROUND, BUT
CONTINUING SOLID GROWTH
The Cairns Economy
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August 2007
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