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Cummings Cummings EconomicsEconomics
The Cairns EconomyRecent Movements and Short-Term Prospects
Presentation to the Cairns Chamber of Commerce Luncheon
August 2007
Cummings EconomicsPh 4031 2888 Fax 4031 1108 Email: cummings@cummings.net.au Web: www.cummings.net.au
Bill Cummings - Principal Cummings Economics Compass Research North Australia Research Group
The Cairns Economywww.cummings.net.au
August 2007
The past year has more than
met expectations of continuing
strong growth predicted in last
year’s review.
Population - GrowthGrowth on Previous Year, Cairns Region
(Estimated Residential)
The Cairns Economywww.cummings.net.au
August 2007
1.0
%
0.9
%
0.5
%
1.5
%
2.3
%
2.3
%
2.3
%
3.3
%
1.7
%
1.4
%
1.5
%
1.2
%
1.7
%
1.4
%
1.4
%
1.9
%
1.5
%
0.8
%
1.3
%
0.9
%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Cairns Cairns Region%
Source : ABS.
Long-Term Projections of Residential Population Growth
Cairns City 2001-2006 Government Projections
The Cairns Economywww.cummings.net.au
August 2007
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
Aggregate ‘Real’ Taxable IncomesGrowth – Cairns Region
The Cairns Economywww.cummings.net.au
August 2007
0.5
%
4.1
%
-3.0
%
0.7
%
4.8
%
9.2
%
12
.4%
1.4
% 2.6
%
1.6
% 2.6
% 4.1
%
7.8
% 8.6
%
0.8
%
-3.7
%
4.0
%
-0.1
%
-5%
-2%
1%
4%
7%
10%
13%
1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
Cairns City LGA Cairns Region%
Asian Crisis Impact GST Impact
(p)
Source : BTRE & ATO.
Value of Building ApprovalsFar North Qld Statistical Division
0
200
400
600
800
1000
12001980/8
1
1981/8
2
1982/8
3
1983/8
4
1984/8
5
1985/8
6
1986/8
7
1987/8
8
1988/8
9
1989/9
0
1990/9
1
1991/9
2
1992/9
3
1993/9
4
1994/9
5
1995/9
6
1996/9
7
1997/9
8
1998/9
9
1999/0
0
2000/0
1
2001/0
2
2002/0
3
2003/0
4
2004/0
5
2005/0
6
2006/0
7
$M
Source : ABS. The Cairns Economywww.cummings.net.au
August 2007
Dwelling ApprovalsFar North Statistical Division
0
500
1000
1500
2000
2500
3000
3500
4000
4500
87/88 89/90 91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06
No.
The Cairns EconomyCummings Economics
August 2007Source : Cummings Economics from ABS data.
Population Growth Rates – Cairns1976/77 to 2005/06
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%19
76/7
719
77/7
819
78/7
919
79/8
019
80/8
119
81/8
219
82/8
319
83/8
419
84/8
519
85/8
619
86/8
719
87/8
819
88/8
919
89/9
019
90/9
119
91/9
219
92/9
319
93/9
419
94/9
519
95/9
619
96/9
719
97/9
819
98/9
919
99/0
020
00/0
120
01/0
220
02/0
320
03/0
420
04/0
520
05/0
6
Source : ABSThe Cairns Economy
Cummings EconomicsAugust 2007
Cairns Airport – Domestic & International TerminalsTotal Arriving & Departing Passengers
% Increase on same month Previous Year
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Oct NovDec Jan Feb Mar Apr MayJun Jul AugSep Oct NovDec Jan Feb Mar Apr MayJun Jul
2006 2007
Source : CPA The Cairns Economywww.cummings.net.au
August 2007
Growth in Room Nights – Hotels/Motels
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%19
97/9
8
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
(1)
(1) First 3 quarters.Source : ABS.
The Cairns Economywww.cummings.net.au
August 2007
Cyclone Impact Nett Stimulatory to Economic Activity
The Cairns Economywww.cummings.net.au
August 2007
Est Loss of Income:Crops $470 m
Est Infusion of Funds:Insurance Claims $420 m
Cyclone Relief $350 m
$770 m
Sugar Prices
The Cairns Economywww.cummings.net.au
August 2007
11.5
9.510.5
15.8
0
2
4
6
8
10
12
14
16
18
2004 2005 2006 2007#
US/Cents per lb*
# projected
Source : ABARE
Beef Prices
The Cairns Economywww.cummings.net.au
August 2007
Source : ABARE
The Cairns Economywww.cummings.net.au
August 2007
FISHING IMPORTANT PART OF
OUTSIDE EARNINGS
MINING INCOME RISING
The Cairns Economywww.cummings.net.au
August 2007
GROWING OUTSIDE EARNINGS
OF SERVICE INDUSTRIES
The Cairns Economywww.cummings.net.au
August 2007
The Cairns Economywww.cummings.net.au
August 2007
AVIATION & MARITIME SERVICING BUSINESS SERVICES CREATIVE INDUSTRIES
Expanding Outside Earnings
Major Development Projects by AreaMarch Quarter 2007
$2.2 bn$1.9 bn
$1.6 bn$1.4 bn
$1.2 bn$0.9 bn
$0.6 bn $0.5 bn
0
0.5
1
1.5
2
2.5$ bn Total $10.3 bn
The Cairns Economywww.cummings.net.au
August 2007
The Cairns Economywww.cummings.net.au
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 Economywww.cummings.net.au
August 2007
HIGHER INTEREST RATES
LESS “CARRY TRADE” FINANCE
MORE CAUTIOUS ATTITUDES TO
INVESTMENT
STEADYING EFFECT ON PROPERTY
PRICES
Housing Affordability – CairnsRepayments as % of Income
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%19
86
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
(1)
The Cairns Economywww.cummings.net.au
August 2007
Source : Cummings Economics & B Jacobsen based on data from RBA, ABS, RP data.
Australian Exchange RatesAust $ / US $
82¢
79¢
88¢
85¢
81¢
79¢
74
76
78
80
82
84
86
88
90
1-Ja
n
1-A
pr
1-Ju
l
25-J
ul
17-A
ug
24-A
ug
¢
The Cairns Economywww.cummings.net.au
August 2007
Source : RBA
5-Year Zinc Price
The Cairns Economywww.cummings.net.au
August 2007
The Cairns Economywww.cummings.net.au
August 2007
Lacklustre Growth Growth in Domestic Market Falls in Some International Markets High Dollar, Loss of Air Services Rises in Domestic Airfares Australians Travelling Overseas
Tourism
The Cairns Economywww.cummings.net.au
August 2007 Source : BTRE
The Cairns Economywww.cummings.net.au
August 2007
New Generation of Aircraft in 2008
Boeing Dreamliners
Airbus A380
The Cairns Economywww.cummings.net.au
August 2007
Cropping for Biofuels
Carbon Sequestration
Interest in North’s Water
Resources
Non-Carbon Fuel Generation
Climate Change Policies
The Cairns Economy ww.cummings.net.au August 2007 Source : Cummings Economics, Aug 2007
The Cairns Economywww.cummings.net.au
August 2007
Domestic Tourism Agricultural Products Fishing Industry Products Mineral Products Aviation & Marine Services Business Services Creative Industries
Cairns Region Leads Northern Region in Sales to the Rest of Australia as
Opposed to Sales to Overseas
Population – Comparative SizeComparative Populations – Northern Australia
Census Count 2006
The Cairns Economywww.cummings.net.au
August 2007
11
7,3
32
14
8,4
12
14
3,4
39
69
,96
5
72
,68
5
21
7,0
93
20
3,7
97
26
4,6
76
19
6,6
31
16
4,0
72
0
50,000
100,000
150,000
200,000
250,000
300,000
Mackay Qld Rockhampton Qld Darwin NT Townsville Qld Cairns Qld
City Regional Stat Div
Source : ABS Census data
The Cairns Economywww.cummings.net.au
August 2007
SOME NEGATIVES AND
UNCERTAINTITIES AROUND, BUT
CONTINUING SOLID GROWTH
www.cummings.net.au
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