With the new year comes some good news for economic growth in Queensland, reports St George Bank in their December Economic Outlook report. 

Commercial construction has strengthened, business investment has gained momentum, growth in employment has been strong over the previous year, and population growth is picking up. 

Key points

Gross State Product (GSP) – while growth was evident in the 2016-17 financial year (1.8%), it was less than the previous year (2015-16 – 2.6%) due to such things the Cyclone Debbie the previous year, drop in mining investment and the slowdown of construction in housing. With that said, St George predict export volumes will push growth of 2.9% in 2017-18, and then a 3.2% increase in 2018-19.

State final demand to the year September 2017 saw a rise of 2.7%, an improvement on the 1.4% growth recorded in September 2016. (See below for explanation of 'state final demand')

Economic activity in the September quarter was restrained with household consumption remaining unchanged, and government investment detracting from growth.

Mining investment – In the last year, three LNG major mining investment projects wrapped up and the industry is now in a new phase of the cycle. Prices for coking coal has rebounded since the lows of US$73 a tone in late 2015, sitting currently at around US$236 a tonne.

Engineering construction has shown it peaked in 2013 and value of work has slid sharply since that period. That said, the two latest quarters have shown some good increases in QLD with an increase on 9.5% increase in the year to the September quarter.

Business Investment – in QLD, for the year ending the September quarter, a rise of 7.9% was recorded. QLD has recorded a rise for three consecutive quarters.

Commercial construction in QLD has continued to flourish due to thriving tourism, especially the international sector.

Population growth in QLD has shown a growth rate of 1.6% for the year to the March quarter.

The QLD labour market is showing improvement with annual employment growth up 4% to the year ending November 2017 (national long term average is 2.3%, and annual national growth is 3.2% to the year ending November 2017).

Note: "State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories." (ABS)