Friday, July 08, 2011

It's a two-speed economy aright. Hello Sydney..

Gaining jobs

Victoria + 25,300
Queensland + 4900
Western Australia +17,100
South Australia +11,100

Losing jobs

NSW - 22,100
Tasmania -1200

ABS 6202.0 Six months to June, trend

Clear enough?

Sydney has joined the upper ranks of the world’s most expensive cities as its economy turns sour. New figures show NSW shedding jobs at the fastest rate in the nation, losing 22,100 workers during six months in which every other state bar Tasmania built up employment.

The Bureau of Statistics figures show Victoria gained 25,300 jobs in the six months to June, Western Australia 17,100; South Australia 11,100 and Queensland 4900.

The losses in NSW turned what would have been a respectable national jobs performance into a mediocre one and helped redefine economic geography.

Victoria is emerging as a winner from what Treasurer Wayne Swan calls the “patchwork economy” along with the mining states of Western Australia, Queensland and - these days - South Australia.

The losing states - whose economies are lagging on a measures including wages, consumer spending, jobs and population - are NSW, the ACT and Tasmania.

The decline is new... During the second half of 2010 NSW outperformed the rest of the nation by a wide margin.

“A mirky election would explain some of it,” said Westpac economist Justin Smirk. “We knew what the result would be but didn’t know what the new government would be like. Consumers normally hide out during election campaigns.”

Sydney’s outsized finance sector might have something to do with it too. “Finance firms were hording labour last year in anticipation of good times. Now they are slimming down by not replacing staff,” said Mr Smirk.

The worldwide cost of living survey released yesterday by the Economist Intelligence Unit moves Sydney up two notches to become the sixth most expensive city in which to live.

Sydney’s prices eclipse those in London, Vienna, Rome, and New York. Only Toyko, Oslo, Osaka, Paris and Zurich remain more expensive. The survey includes rents, electricity, public transport, private schools and the price of domestic help.

The intelligence unit priced a one-day business trip to Sydney at $US627. The cost included one night's accommodation, a two-course meal, a simple meal, two taxi journeys, a drink in a hotel bar and an international newspaper.

The managing director of the Sydney-based funds management firm Rismark International Christopher Joye said much of the apparent increase would have measured the 20 to 30 per cent surge in the Australian dollar.

“Australians earn Aussie dollars, so a lot of that increase has had no impact on us. In fact the higher dollar has lifted our purchasing power. We can buy overseas goods more cheaply.”

“On the other hand we are now a more expensive destination for immigrants and visitors who pay in their own currencies. Our cost of living is increasing faster than other developed countries and this will get worse as the investment boom squeezes out our remaining spare capacity.”

Australia’s national unemployment rate remained steady at 4.9 per cent in June as jobs growth did little more than keep pace with population growth. The NSW unemployment rate climbed to 5.2 per cent. Victoria's slipped to 4.6 per cent and Western Australia’s to 4.2 per cent.

Treasurer Wayne Swan welcomed what he said was evidence of one of the strongest economies
in the developed world. “When the global financial crisis hit, our unemployment rate was the same as the United States. Now it is half that,” he told parliament.

Published in today's SMH

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