July 2014

Slow Hunter economic recovery from post-boom slump

The Hunter economy is now feeling the effects of the post-boom slowdown to a greater extent than the rest of the nation and the State according to the HVRF’s latest Hunter Region Economic Indicators.

The Foundation’s March quarter publication shows that total employment has fallen from the peak levels of late 2013 and the unemployment rate is starting to rise.

HVRF Senior researcher Jenny Williams said that although the Region was sheltered from the full effects of the global financial crisis by the resource-related investment boom, it is now likely to experience a slower recovery than the nation.

“Our research has shown subdued business confidence in the Region and weakened consumer expectations in March.

However, the overall outlook for the regional economy is similar to the slow recovery predicted by the Reserve Bank of Australia for the rest of the nation.”

Other key indicators show:

• Residential building approvals continued to increase but at a slower rate than elsewhere, with signs that the real estate market has peaked in the wake of declining demand

• Business caution at the national level around investment in the non-mining sector was evident in the Hunter and impacting investment decisions

• Hunter household personal finance expectations continued to weaken with consumers also facing an increase in the cost of living increase as wages growth falls behind price increases

• Short-term downside risks of reduced demand for Hunter exports, and of fiscal consolidation, may outweigh upside potential of new infrastructure investment and efforts to boost productivity.