Unemployment in South Australia may have peaked, an updated economic outlook concludes.
Deloitte Access Economics’ latest assessment of the state economy also hoses down concerns around the knock-on impact of the 2017 Holden closure.
The Deloitte optimism follows the SA Centre for Economic Studies report last month that expected structural adjustment in the economy to overcome the worst of the job losses.
“We don’t buy into the doom and gloom view of the moment,” says Deloittes’ quarterly Business Outlook, released today.
“Fears around the knock-on effects from Holden shutting down its manufacturing operations at Elizabeth are way over-done.
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“The number of jobs directly lost in South Australia as a result of Holden ending its local manufacturing operations is likely to be less than 2000 people.
“Although that is undoubtedly a disaster for the individuals involved, it isn’t a disaster when measured against the state’s employment base of 800,000 people.
“More broadly, although the state has a large car and parts manufacturing sector – the latter is two times larger in South Australia than it is in the ‘average’ state – it isn’t a major part of the wider economy.”
Unemployment figures released last week showed SA had the highest rate in the nation at 7.4 per cent – a 13-year high.
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The Deloitte report says there are other economic indicators that provide good news for South Australia.
“The $A is lower and interest rates are close to record lows.
“That combination is much better news for job creation in South Australia than Holden and associated effects are for job losses.
“And those are merely some of the longer-term positives worth noting. There’s also joy to be had in some shorter-term trends, too, with the housing construction sector revving up (both approvals and housing finance are looking good), with unemployment appearing to have peaked, with public spending resilient, and with retail sales momentum looking healthy – especially when adjusted for population growth.”
Last month the SA Centre for Economic Studies produced a special briefing on “Life After Holden”.
It argued that the rationale for making cars in Australia was non-existent.
“It is important to focus on the inevitable and to begin the process of assisting workers to adjust, to ensure the full burden does not fall on existing workers and on regional locations and that future generations train for other employment.”
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