With the release of their quarterly Hunter Economic Update the Hunter Valley Research (HVRF) has signified a challenging year ahead for the local business sector.
Business confidence is low, with estimates for the next three months in the areas of Business Performance, Forward Orders, Business Profits, Employment Intentions and business perceptions of the regional economic outlook all very weak compared to historical measures.
This is seemingly offset by the 12-month outlook which, while muted, was more optimistic potentially reflecting a belief that the situation has the capacity to improve.
However the report stated that at present, the Region's business community sees risk and not opportunity, and there is a concern that this can be self-fulfilling.
Director of Research Simon Deeming said that the return of the Australian dollar to a less restrictive condition and the prospect of persistent low interest rates will assist housing, retail, accommodation, manufacturing, tertiary education and a range of sectors across the Region.
“However, this gradual medium-term improvement will be set against the stark short-term consolidation of large-scale, resource-based activity,” Simon said.
The consolidation of the coal-mining sector is starting to weigh on the regional economy and the labour market, although this is not evident from the headline figures, with total employment rising by 4 per cent to 324,200 in the June quarter and unemployment remaining at just over 5 per cent.
“Looking below the headlines, total employment has stalled in recent months and the unemployment rate has remained low due to a decline in the participation rate, reflecting rising disillusionment among job seekers.”
Simon presented the full results at the HVRF Hunter Region Economic Update breakfast on Friday, 26 July 2013 alongside a presentation on national and global economic conditions by RBS Morgan's Chief Economist Michael Knox.
To download the Hunter Region Economic Indicators June quarter 2013 publication or view Simon's presentation, visit the HVRF website.