South Australia’s Centre for Economic Studies has today released a report arguing that the South Australian economy is experiencing its worst economic downturn since the early-1990s recession on the back of lower investment activity. From the AFR:
The Economic Briefing Report found real state final demand decreased by 2.6 per cent from the previous year, which was the largest annual SFD fall in the period covered by the modern National Accounts data.
Centre for Economic Studies executive director Michael O’Neil said this “sustained decline” indicated the state was in recession…
The state has come under enormous financial pressure over the last year with the government forced to grapple a bulging public sector wage bill, revenue writedowns and the loss of BHP’s $25 billion Olympic Dam expansion project.
Confidence is also low in the state’s manufacturing sector with the future of car maker Holden’s Elizabeth factory in doubt.
Certainly, recent data flow suggests that the South Australian economy is teetering on recession, if not there already.
First, state final demand has declined for three consecutive quarters:
Next, although South Australia’s unemployment rate is still quite low (5.9%), it has increased significantly over the past 18 months (see next chart).
More worryingly, the ABS job vacancies series is showing a marked deterioration in employment market, with the number of job vacancies more than halving over the past three years:
Overall, not a pretty picture.