Ref: J2683 | 23 July 2013

PRESENTATION TO

WS (Bill) Cummings

MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION,

MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES

The Cairns Economy Recent Trends & Prospects

2

0%

1%

2%

3%

4%

5%

6%

Year

19

77

/78

19

79

/80

1981

/82

19

83

/84

19

85

/86

19

87

/88

19

89

/90

19

91

/92

19

93

/94

19

95

/96

19

97

/98

1999

/00

20

01

/02

20

03

/04

20

05

/06

20

07

/08

2009

/10

20

11

/12

(1) Cairns Statistical Sub Division to 2011 & Cairns North + Cairns South SA3 2011/12

Source: Cummings Economics from ABS data. Cat. 3218.0 & Previous.

RESIDENTIAL POPULATION GROWTH : CAIRNS

3

Notes:

(1): Cairns North & South SA3s.

(2) Excludes substantial ‘not stated’.

Source: Cummings Economics from ABS Census data, 2006 & 2011.

2006 2011 Growth

No. %

BY USUAL RESIDENCE 60,420 67,714 +7,294 +12.1%

BY PLACE OF WORK (2) 54,273 57,289 +3,016 +5.6%

WORKFORCE GROWTH – CAIRNS (1)

4

Source: PNG Cummings Economics industry information.

Other ABS 2011 Census data.

PENINSULA & GULF 983

NORTH WEST QLD 702

OTHER NORTH & CENTRAL QLD 664

EAST ARNHEM 239

OTHER NT 131

KIMBERLEY & PILBARA 169

est. PNG? 400?

TOTAL 3,300

NUMBER OF CAIRNS & IMMEDIATE REGION RESIDENTS WORKING AT LOCATIONS OUTSIDE THE REGION 2011

5

Note (1): 2006 Cairns Statistical Sub Division 2011 Cairns North & South SA3s.

Source: Cummings Economics from ABS Census data, 2006 & 2011.

WORKFORCE GROWTH 2006 - 2011 BY SELECTED INDUSTRIES (USUAL PLACE OF RESIDENCE) CAIRNS (1)

TOTAL INCREASE +12.1%

HIGHEST Mining +101.9%

Health care & social assistance +46.8%

Electricity, gas & water +28.4%

Education & training +27.9%

Public administration & safety +24.2%

LOWEST Information media & telecommunications (-13.8%)

Construction (-8.2%)

Rental, hiring & real estate services (-7.7%)

Financial & insurance services (-3.7%)

Manufacturing 0.0%

6

IMPACTS ON THE REGIONAL ECONOMY GFC & FOLLOWING

INVESTMENT / CONSTRUCTION

DOWN

I HOUSEHOLD

EXPENDITURE DOWN /

SAVING UP

C OUTSIDE

EARNINGS DOWN (ESP TOURISM)

Ex GOVERNMENT EXPENDITURE

UP

G

7

“Things have been tough for many businesses since 2009. However, I am rather hopeful that we will be able to record that 2011/12 was the bottom and that 2012/13 will see the growth rate starting to turn upwards again.”

8

FNQ STATISTICAL DIVISION CHANGE IN EMPLOYED QUARTERLY WORKFORCE COMPARED WITH SAME QUARTER PREVIOUS YEAR

Source: Cummings Economics from ABS Labour Force Australia 6291.0.55.001.

9

2012 / 13

TOURISM OUTSIDE EARNINGS UP HOUSEHOLD SPENDING STILL CAUTIOUS GOVERNMENT SPENDING DOWN CONSTRUCTION DOWN AGAIN

10

GOVERNMENT EXPENDITURE

CHALLENGES

• BASE HOSPITAL TO TOP LEVEL FUNDING

• UNIVERSITY STUDENT NUMBERS TO REGIONAL AVERAGES

• CONTINUE ROAD UPGRADING

• SOCIAL INFRASTRUCTURE : SPORT & CULTURAL

GOVERNMENT EXPENDITURE

DOWN

G

11

Since 2008 population of Cairns up about 10,000 (7.2%)

12

OUTSIDE EARNINGS

13

TOURISM - $2.3BN

All Hotels, etc.

-9.5-5.5

2.4

-1.0

3.1

-1.4

1.5 3.1 2.0

-2.1

4.80.9

16.712.8

84.9

6.8 5.6 4.8 6.4

16.1

9

-3.5

12.17.8

-3

00.4

-8.4

-20.0

-10.0

0.0

10.0

20.0

Jan FebMarAprMayJuneJuly AugSep OctNovDec Jan FebMarAprMayJun Jul AugSep Oct NovDec Jan FebMarAprMay

%

2010 2011 2012

Unit nights - changes over same month previous year

-2.5

-21.3

18.3

10.1

3.7

-2.6

-7.3

1.6

8.3 7.3

18.4

6.5

21.4

11.4

2023.3

10.8 8.9

16.7

7.9

21

9.75.9

8.26.5

-6.5-9.4

13.8

-3.9

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

Jan

Feb

Mar

Apr

May Jun

Jul

Aug Se

p

Oct

Nov

Dec Jan

Feb

Mar

Apr

May Jun

Jul

Aug Se

p

Oct

Nov

Dec Jan

Jan

Mar

Apr

May

2010 2011 2012

%

Change Over Same Month Previous Year

Source: Tourism Tropical North Qld – Tourism Monitor series.

14

TOURISM PROSPECTS

DOLLAR DOWN BROAD GROWTH

NEW MARKETS CHINA

New Generation of Aircraft in 2008

16

Est Present Value of Economic Efficiency Benefits $166 m

Est Present Value of Additional Gross Regional Product $436 m

PROSPECTIVE INCREASE IN CRUISE SHIPPING, 2011 DOLLARS

17

0

200

400

600

800

1000

1200

1400

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

2007/0

8

2008/0

9

2009/1

0

2010/1

1

$M

GROSS VALUE OF AGRICULTURAL PRODUCTION

Source: Cummings Economics from ABS Agricultural Financial Statistics 7503.0.

18

Source: United Nations Food & Agriculture Organisation, 2013.

19

MINING

• Extra BMA FIFO workforce 250 : flights to Moranbah

• Continuing engagement with PNG

• Major Capital Expenditure Weipa $1.3BN with 2000 bed FIFO camp

20

• AVIATION SECTOR – GROWING

• MARITIME SERVICING – BACK UP

• WEIPA TRADE – UP

• MARINE SERVICES – FIFO LNG PROJECTS

• TRADE EDUCATION – UP

• INTERNATIONAL EDUCATION – FALL IN DOLLAR WILL HELP

OTHER OUTSIDE EARNINGS

21

CONSTRUCTION

1996 - 2001 (-14.66%)

2001 – 2006 +71.93%

2006 - 2011 (-8.2%)

INTER-CENSAL WORKFORCE CHANGES CAIRNS (1)

Note (1): Cairns Statistical Sub Division, 1996 – 2006. Cairns North & South SA3s, 2006 – 2011.

Source: Cummings Economics from ABS Census data, 2006 & 2011.

22

BUILDING APPROVALS CAIRNS & IMMEDIATE REGION

Dwelling No. Value Non dwelling value Total value

2011/12 892 $381 m $171 m $553 m

2012/13/11 mths 602 $223 m $95 m $318 m

Source: Cummings Economics from ABS Building Approvals 8731.0.

23

CONSTRUCTION STIMULUS FACTORS

• RENEWAL & RECONFIGURATION

• POPULATION OF CAIRNS UP SINCE 2008 BY ABOUT 9% ABOUT 13,000

• MEETING SPECIAL NEEDS OF NEW MARKETS, EG. CHINESE VISITORS.

24

BABINDA Former mill site – commercial & industrial

GORDONVALE Shopping Centre (Woolworths)

Residential

EDMONTON Town Centre (Mann’s farm)

Hospital (detailed design phase)

Commercial industrial & private hospital (Pregno’s)

CITY Drive-in site units

Bunnings

Harvey Norman & gas works site

Central Park retail

Aquarium

PROSPECTIVE DEVELOPMENTS

25

AIRPORT New general aviation

REDLYNCH Shopping Centre

Residential

SMITHFIELD

Water Park

Shopping Centre expansion

University

NORTHERN

BEACHES

Retirement Centres

Palm Cove/Double Island development

$4bn Integrated Resort, Yorkeys Knob

PROSPECTIVE DEVELOPMENTS

26

PROSPECTS FOR CAIRNS REGION’S ECONOMY LOOKING BETTER THAN HAVE BEEN SINCE THE GLOBAL FINANCIAL CRISIS HIT FIVE YEARS AGO IN 2008.

LOOKING FORWARD

www.cummings.net.au

MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION,

MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES

The Cairns Economy Recent Trends & Prospects