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South Australian Unemployment Reaches 15 Year High of 8.2%

Discussion in 'Property Market Economics' started by 2FAST4U, 9th Jul, 2015.

  1. 2FAST4U

    2FAST4U Well-Known Member

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    South Australia's unemployment has increased to 8.2%
    http://www.abs.gov.au/ausstats/abs@...ummary&prodno=6202.0&issue=Jun 2015&num=&view=

    http://www.adelaidenow.com.au/news/...t-a-15-year-high/story-fni6uo1m-1227435004822

    SOUTH Australia’s jobs catastrophe has become a “human crisis” according to the state’s foremost business representative.
    As the state’s unemployment rate moved past 8 per cent in June for the first time in 15 years, Nigel McBride, Business SA CEO, said “we can’t rationalise it or justify it, we just have to deal with it on the facts.”
    “This isn’t just an economic crisis, it’s a human crisis and the impact of this right across the state is starting to be felt,” he said.
    “Sadly we don’t see any reason why this is going to turn around.”
    SA’s unemployment rate rose to 8.2 per cent in June, as the state continues to shed thousands of jobs.
    ABS data out this morning shows a drop of almost 6000 jobs in one month.
    And it is becoming obvious that the employment crisis is here to stay, with the trend rate — which smoothes out month to month volatility — rising to 7.8 per cent.
    The last time unemployment was as high in SA as it is now was the year 2000.
    South Australia’s unemployment rate is now 1.7 percentage points higher than any other state or territory as Tasmania’s rate eased in June to 6.5 per cent.
    Mr McBride said the outlook was particularly bad for parts of regional South Australia such as Port Pirie or Port Augusta, which already face double digit unemployment.
    “We’re seeing a situation where there’s a human cost,” he said.
    “We’re seeing it in mental health, we’re seeing it in drug abuse and ice, we’re seeing it across the board that there’s no incentive for businesses to hire, to train.”
    Last month Liberal employment spokesman David Pisoni said there were problem signs in the economy.
    But Employment Minister Gail Gago said while the increase in the unemployment rate was disappointing, there were some “encouraging” signs in the May figures.
    “South Australia’s economic basis has been more reliant on traditional manufacturing industries which have contracted dramatically in recent years. This has resulted in a more subdued labour market performance,” she said.

    Recent job losses in SA
    Arrium Mining: 580
    Santos: 500 (nationally)
    Holden: 270
    BHP: 230 since February, plus potentially 130 contractors
    Arnotts: 120
    United Dairy Power: 100
    Aldinga Turkeys: 79
    Leane Electrical: 40
    Hills: 35
    Penrice: 95
    OZ Minerals: 80
    Murray Zircon’s Mindarie mine: 36

    Job losses to come
    Alinta Energy: 440
    Holden: 1260
    Arrium Mining: More TBA
     
  2. 2FAST4U

    2FAST4U Well-Known Member

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    I was doing some research on SA unemployment levels and it looks like we're heading back towards 90s levels of consistent double digit unemployment. Besides being cheap I can't really see anything that Adelaide has going for it. Much of Adelaide's property has been stagnant (particularly the Northern and Outer suburbs) since the GFC. I know many people have been suggesting Adelaide and Brisbane are dark horses but with unemployment expected to rise, coupled with low population growth I'm not sure where the optism for Adelaide comes from...
     
  3. Darren A

    Darren A Well-Known Member

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    The saddest part of this is the paragraph below.

    “We’re seeing it in mental health, we’re seeing it in drug abuse and ice, we’re seeing it across the board that there’s no incentive for businesses to hire, to train.”
     
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  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    Sounds good to me, Adelaide's biggest boom was in 2000. Hopefully we have that to follow if you think it's repeating?
     
  5. 2FAST4U

    2FAST4U Well-Known Member

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    I think it's going to be the opposite actually. Unemployment is going to increase back to 90s levels (which were always around 9-12% throughout the decade, which will cause stagnation with most outer suburbs and CPI increases for inner suburbs.
    http://lmip.gov.au/default.aspx?LMIP/LFR_SAFOUR/SA_LFR_LM_UnemploymentRateTimeSeries

    It was around the year 2000 that the Liberals halved the Capital Gains Tax, which would've encouraged investment. As you can see on the link unemployment in SA was lower each year from 2000 to the GFC at one stage reaching only 4.7%. So given the fundamentals it was only natural for property to boom in Adelaide during that period.

    Long term I expect wage growth and inflation to keep property prices rising though.
     
  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    SA has now had about a decade of labor leaders - funny how that prophecy played itself out. Liberal will finally get back in and all will be good again.

    Again, the macros dont actually reflect whats going on on the ground. Lots of people are getting new, or changing between, jobs without any more than a couple of weeks gap. People are starting new businesses. Commercial For Lease signs in the city (always a fun indicator for me) are turning over quickly enough (I'm back and forward to Perth, and the number of For Lease signs, especially on St Georges Tce and Hay St is astonishing). Decently priced residential property is getting snapped up quicker and quicker each month.

    Are you saying my glasses are too rose colored?
     
  7. Azazel

    Azazel Well-Known Member

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    That's bad news, feel kinda sorry for the people struggling over there.
    I know one couple from Adelaide who already moved to Canbrrr for work.
     
  8. 2FAST4U

    2FAST4U Well-Known Member

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    Liberal couldn't be any worse so they'll probably get elected but the problem with SA is the unemployment is structural. We've got a traditional economy reliant on manufacturing, which is going through a slow and painful death. On the ground level I've seen a few new businesses open (mainly hospitality places e.g pizza stores) but you can't have a successful economy selling coffees to each other. As for decently priced resedential property it will always get snapped up fast because you've still got 90% of the labour force in good paid stable jobs.
     
  9. 2FAST4U

    2FAST4U Well-Known Member

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    The sad thing is it ends up becoming a vicious cycle. Unemployment goes up and the economy starts contracting. The Government's revenue also contracts. Subsequently car registrations and every other revenue raising tool has to be implemented and maximised. That uses up people's disposable income, which once again doesn't get spent on business. Businesses are receiving less income so they have to let staff go. Cyle starts over.

    The trouble is our State Government wastes millions on projects that nobody really wants e.g projected $160 million on an O'bahn extension. It also wastes millions on a top heavy public service full of beauracrats who can't see anything but a great lifestyle from their ivory towers. I'm sure once Holden closes they'll waste some more money increasing Centrelink offices, counsellors, and upgraded police stations. That money would be a lot better spent on health and education, which would hopefully boost productivity.
     
  10. Azazel

    Azazel Well-Known Member

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    @2FAST4U sounds just like what happened in Brisbane. Used to be a lot cheaper to live there, hence the interstate migration. Petrol subsidy gone. Beattie promised electricity prices wouldn't rise when privatised - ha. Rego one of the most expensive in the country. 1st state to lose their international AAA credit rating.
    I think SA and QLD both have one of those lemon de-sal plants too?
     
  11. JDP1

    JDP1 Well-Known Member

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    Brisbane cannot he compared to Adelaide. Totally different league. Just as Brisbane cannot be compared to Sydney.
     
  12. 2FAST4U

    2FAST4U Well-Known Member

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    Yeah SA has a desalination plant that hasn't been used since it started. We also privatised ETSA and sold it off to a Chinese billionaire who is now laughing all the way to the bank. With the funds from the sale they built a 1 way expressway, which was recently transitioned into a 2 way expressway at a great cost. It probably cost them triple the price instead of just building it propertly the first time. Now we have the highest electricity prices in Australia, the most severe fines for speeding/traffic offences, ESL levies, high registration costs, relatively high stamp duty etc. Thankfully the SA Government hasn't privatised our water yet but they still use it as a cash cow. 4 consecutive terms of Labor has destroyed this state. Yet sadly people still keep voting for them as seen in a recent by-election. It's madness.
     
  13. Aaron Sice

    Aaron Sice Well-Known Member

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    can i just ask, how many jobs were created in that period?

    because balanced discussion.
     
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  14. 2FAST4U

    2FAST4U Well-Known Member

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  15. Aaron Sice

    Aaron Sice Well-Known Member

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    Man that graph ain't pretty!
     
  16. Bran

    Bran Well-Known Member

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    Scary.

    More comers to Brisbane? They sure as hell won't afford moving to Sydney or Melbourne.
     
  17. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Wife was made redundant from her role working in a listed resources and energy co a month ago - spent a total of one week unemployed.

    Interestingly our household has been listed for survey for the ABS unemployed figures, so she'll play a miniscule increase and decrease in employment over the months. :)

    Stagnant government and an over reliance on industrial manufacturing has gotten us to this place - once SA pulls the bandaid off and adjusts to the new reality it can start moving onto greater things.
     
  18. kamchatsky

    kamchatsky Well-Known Member

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    The question is, why people still voted Labor? Why is not Liberals voted back in last election? Surely people would have sick of the state of economy by now.

    Or the voters just wants handouts which Labor always provide (and Liberals not). Then you have a bigger problem of changing voters mindsets to rebuild the economy again.
     
  19. 2FAST4U

    2FAST4U Well-Known Member

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    I guess people are still brainwashed into thinking Labor are for the workers. Even today on the facebook comments a lot of people were blaming Abbott for South Australia's unemployment... If you vote for Labor you're voting yourself out of a job.

    [​IMG]
     
  20. D.T.

    D.T. Adelaide Property Manager Business Member

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    [​IMG]
    According to Mr Wargent, all the states are basically tracking along the same?
     
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