Coast economy continues on downward slide

Employment

In the three years from September 2006 to September 2009, employment numbers have decreased from 147,700 to 134,300 – a decline of 9%.

However, according the CCRF’s business confidence surveys, the employment intentions of Central Coast businesses are stronger than they have been over the past three years.

Meanwhile, unemployment has risen to 6.8% compared with the NSW average of 5.4%.

Residential building approvals

Building approvals for the Central Coast have been in decline since December 2002 with the exception of a spike in 2007.

The CCRF points out that this has occurred despite the record low interest rates which have prevailed for the past year.

The lack of approvals activity suggests that the supply of new housing will continue to be constrained for some time to come and this undersupply is likely to place upward pressure on prices.

Residential sales

The CCRF says that the real value of residential house prices on the Central Coast has fallen at an increasing rate during much of the last two years to March 2009.

However, the results for the March 2009 quarter in both the region and NSW were improved from the previous quarter which suggests that there may be some increased activity in the first home buyer segment of the market.

Residential rentals

Rents on the Central Coast over the three years to June 2009 have increased in real terms.

Declines in rents for two-bedroom flats in the three quarters to June 2009 do, however, illustrate the weakening of the rental market in response to falling employment and a weaker economy.

New vehicle registrations

New passenger vehicle registrations have been declining for five out of the last six quarters to June 2009 reflecting the relatively weak economic conditions which have prevailed during this time.

New commercial vehicle registrations, however, have surged in the June 2009 quarter due to the Federal Government’s investment allowance and stimulus package.

The outlook

The CCRF says that there is reason to be cautiously optimistic about the regional economy.

There are signs of improvement in both consumer and business indicators as well as the labour market.

There is some potential for the recovery to slow as both fiscal and monetary policy settings return to more ‘business as usual’ settings, however, renewed optimism is likely to drive more robust economic activity.

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