Central Coast economy on downward slide

This comment and economic indicators for the region were presented at the Central Coast Research Foundation (CCRF)’s March 2009 Quarter Economic Update Breakfast in early May at Mingara Recreation Club.

Employment levels have been declining for the past three years from an all time high of 147,700 in September 2006 to 135,700 in March. Both household and business sectors of the Central Coast economy have recorded the lowest levels of confidence for the last nine years (the period for which data is available).

Employment
The most marked characteristic of the region’s employment figures is the decline over the past three years from a high in September 2006 of 147,700 to 135,700 in March 2009. The unemployment rate has been rising for most of the past twelve months, while the participation rate has been falling for most of 2008 and early 2009. This indicates a reduced number of jobs being advertised and available.

According to the CCRF’s survey of businesses’ employment intentions, businesses are expecting to decrease their workforce in the coming three months although in the longer term (12 months) they expect it to rise. Businesses are also expecting a decrease in overtime.

Building approvals
The CCRF says Central Coast residential building approvals continue to decline and in general this has been the case over the past three years.

It appears that the First Home Buyers Scheme has bypassed the region as the number of first home buyers entering the housing market does not equate with the approvals data. Consequently, the increases in housing supply have been relatively small. This has had conflicting impacts. One the one hand, construction and the multiplier effects that flow from it have been declining, while on the other hand limited supply has prevented the more marked devaluations of property that have occurred elsewhere.

Residential sales
The CCRF says that house prices have been falling across the Central Coast – and NSW – for some time, although the region has suffered more than the State average. While annual declines have occurred throughout the whole of the past three years, at varying rates the most marked downturns were in 2005 and mid-2008.

Rentals for two-bedroom flats and three-bedroom houses has remained fairly flat over the past three years but declined by 4% over the past year.

New passenger vehicle registrations
Passenger motor vehicle registrations increased in the March Quarter compared with 2008 after declining through all of 2008.

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