Outlook for Coast economy uncertain

Nearly 200 of the Central Coast’s leading business figures attended the Foundation’s half-yearly Economic Update Breakfast in late November to hear Research Fellow, Caroline Veldhuizen report on the region’s economy.

The report said that the region’s labour market and household sector were both weak and beginning to feel the effects of the global financial crises in the September 2008 quarter.

Expectations for reduced spending in the coming months, and plummeting confidence are, however, likely to mean that business conditions will worsen.

The labour force
During the September 2008 quarter Central Coast employment fell below the numbers consistent with the long-term trend of growth, and the unemployment rate increased each month. Employment fell from 139,700 in March 2008 to 137,500 in September 2008. In the same period unemployment rose to 5.7% compared with the NSW average of 4.9%. Together these indicators paint a picture of a weakening labour market.

In addition the region’s businesses’ intentions to employ new staff during the next 12 months were the lowest for the past three years.

Residential building approvals
The Foundation says that residential approvals have been constrained over the last three years with only four quarters out of the last twelve saw real value of approvals increased from the same time a year earlier.

The chart above shows how residential (all dwellings) prices have declined over the past three years compared with the previous four years.

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