The last of the inflation reports – the producer price indexes – out last week, confirms the absence of significant inflationary pressures. Hence, no change in official interest rates yesterday.
And looking forward, if the recent surge in the Australian dollar is sustained, it means even less inflationary pressure i.e. imports are cheaper.
But, and there is always, a but, one area that is experiencing inflation is the construction sector and in particular, in Queensland.
In Queensland, overall building construction costs are rising at a 5% annual rate. This compares to a 2.8% lift across Australia.
No doubt the extent of home building – both for detached houses and apartments; infrastructure development and the Commonwealth Games, would be driving up costs. But so, too, is unionised labour, especially in high-rise apartment builds, and in the bigger non-residential construction jobs.
I also cannot but think what will happen in Queensland once the current construction surge dies down.
Some 43,000 new jobs have been created across Queensland over the last twelve months, of which 36,000 were part-time and, overall, just 7,000 were full-time positions.
Construction was responsible for some 40% (17,000) of these new jobs and nearly all of them full-time positions. Obviously, some job sectors in Queensland have lost full-time positions over the last year.
What new jobs will replace these Queensland construction positions? Where will the new jobs be located? How much will they pay?
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Keen to hear your thoughts.
Until next time,
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