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Monday, August 8, 2022

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Covid and the year that was

With Shaun Donaldson

As we round out 2021, I am optimistic that we can leave the past two years behind us and start preparing for a (mostly) post-Covid world.

There is no doubt that many of us are still feeling the effects of lockdowns, in particular our tourism businesses that have been the heart of our region’s prosperity for so long. But as vaccination rates improve and we look forward to relaxed measures interstate and internationally, I think now is a good time to look back on the year that was and reflect on how our region has fared.

In many ways, Far North Queensland has withstood the past 12+ months remarkably well. There are typically three barometers people look towards to gauge the state of the local economy.

The first of these is the region’s unemployment rate.

According to the Australian Bureau of Statistics, in June of this year the Cairns unemployment rate was just short of 1.5 per cent lower than greater Queensland (5.4 per cent compared to 6.8 per cent). While this is on par with the disparity in rates over the past few years, it is reassuring to see that we have not slipped back to post-GFC figures when we were as much as two per cent higher than the rest of the state.

It is also good to see that we were seeing very similar figures in June of last year, when many businesses were staying afloat with the help of JobKeeper and other Government stimulus. Many of us feared that the end of those would signal the end of our economic security, but (knock on wood) so far we are proving to be more robust than expected. Cairns was enjoying a downward trend in unemployment in the lead-up to Covid, and once tourism returns and we start feeling the positive flow-on effects, I think we can expect that trend to resume.

Another indicator used to assess the economy is property prices. In previous crises, namely the pilot strike and the GFC, we witnessed property prices and the property market plunge. This time, residential vacancies are at what could be an all-time low of 0.8 per cent, and anecdotal evidence suggests property prices are up as much as 10-15 per cent in the past 12 months. This seems to be in line with our neighbours in South East Queensland, whereas we are normally falling behind our southern counterparts.

To give one example, in just two days the new development The Palms sold 26 of their 40 total lots. The rate at which these lots were snapped up suggests locals are ready, willing and eager to buy quality property when it’s available. There is some concern that the economy is inflated with Government money and that house prices can’t go up forever, but right now things are generally looking very positive.

The final barometer for the local economy is business sentiment. As with the other two indicators, business sentiment is, for the most part, optimistic. With the exception of those in the tourism and hospitality sector, most of the community seems to be feeling positive and confident for next year. I had the chance to spend some time with people who travelled up from Brisbane for the Cairns Amateurs, and the overwhelming takeaway for them was how relaxed people are in the region. We have been incredibly fortunate to largely avoid the need for regional lockdowns and mask-wearing, and as a result we have mostly dodged the anxiety they can bring.

Over the past 12 months we have had almost uninterrupted opportunities to go out for a meal or a drink, go to the movies, go to gym and see our local friends whenever we liked. Many areas didn’t fare as well, and I believe this has lent itself largely to the optimism the community is feeling.

All in all, it seems the region has been much more resilient over the past 12 months than many of us feared or expected. Where we were once a bit of a one-trick pony with our heavy dependence on tourism, it appears we have matured enough to now provide more support to the tourism sector with strong agriculture, health and marine industries.

Of course, it is near impossible to tell what the future holds, as we have seen over the past two years, but as more and more people get vaccinated and we start to welcome back domestic and international tourists, I think the optimism we are all feeling should prove itself to be reliable. Protect yourself and your business, get the jab, talk to business advisory experts and prepare yourself for whatever may come next.

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