A definitive analysis of unemployment trends in Cairns

Unemployment Rate

 

  1. Boys trend better than girls possibly because they are simpler less evolved organisms.
  2. If we stir the tea leaves with our participation rate spoon we can surely spin a narrative around the female gyrations but a prudent punter would place an each way bet on random.
  3. Despite female volatility they do tend to correlate except …..
  4. WTF is that gap that opens up around 2014-2016?

Notes: Derived from ABS annual average with proprietary eyeball trend methodology applied in Microsoft Paint.

 

 

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Regional data dilemma

The previously posted Cairns Chamber presentation from Bill Cummings includes some strong opinions on survey sample data:

Unfortunately, there is another series based on sample surveys that causes confusion – the ABS Labour Force series is published each month. Just how bad the series is, is illustrated by comparison with Census data when it came through.

Dilemma 1

Source: Cummings Economics

 

Did have a quick look at this previously and put together a few numbers which I haven’t gone back to check which may have been wise but anyway:

Dilemma 2

The numbers for the ABS Labour Force Survey (LFS) numbers are taken from August each year which is the month of the census. The ATO data (also from ABS) is derived from tax data for the prior financial year.

The Cummings difference for Cairns appears to be derived from the ABS recommended 12 month average for the (LFS) data. Had he used the Conus Trend the decline would have almost halved to 5,100. The original monthly data for August would have been lower too but that’s as much a fluke as anything given the notorious volatility of the regional LFS data.

The ATO data here is derived from two different series which represent categories of employment . I don’t claim to be on top of the nuances of these different series. It isn’t the number or the discontinuity that matters but the trend. I can’t think of any reason why the trend in this data should not be consistent with employment in Cairns over the period. Previous posts on this data: Personal income down to SA2ATO income data and Cairns City.

Similarly we shouldn’t focus on the difference in number of employed between the Census and LFS: Differences between the LFS and the Census, which includes comparisons for the 2011 Census. These will be different and a quick look suggests an expectation of a similarly higher number at both Australia and Queensland level for the LFS at the 2016 Census. It’s the 2011 – 2016 period where the difference appears anomalous for Cairns SA4 between different data series.

In timely fashion this month Ricardian Ambivalence rose from a long slumber to remind us that “the survey isn’t designed to measure the number of people with jobs. It is designed to measure the unemployment rate.”

Explained in more detail back in 2012: It’s the unemployment rate …

The household survey is NOT designed to measure the number of jobs. It is designed to measure a bunch of key ratios, including the unemployment rate. Multiplication of population forecasts by the ratios yields the so-called jobs number. Population over- and under-estimates are corrected for by smoothing subsequent population estimates toward the revised estimate, and this may distort the derived levels.

The ABS Labour Force Survey problem is not that any number could be wrong but that at regional level employment data may be misleading not just over short periods related to sample volatility but over extended periods.

Weekend Diversions

It looks like getting hot and unpleasant in coming days. An excellent opportunity to sit back, relax and catch up with the annual presentations a few months ago now to the Cairns Chamber lunch by Bill Cummings and Rick Carr:

Rick Carr: The Cairns Property Market

Bill Cummings: Text; Presentation.

These two have been around so long that Mayor Manning may be the only person left in Cairns who remembers when they were not around. It means they offer valuable experience and insights. It also means they carry a few barnacles which should be scraped from the hull.

Cairns Airport: Friday dump

Cairns Airport has posted numbers for September. International -4%, domestic -3% on the previous September 2017.

Airport Sep

Without an imminent turnaround that annual trend could pull down for at least a few months yet. The numbers here are Cairns passengers ex transits etc. The full annual data including transfers and transits has gone negative which will likely flow through to the BITRE comparative data in coming months.

No commentary again from the airport in this report which is odd because they were happy to comment earlier in the week to the Cairns Post on “new data” related to performance and direct flights. Never mind, something to come back to when it isn’t a Friday night.

Saturday morning update: School holiday changes may also influence the September numbers so likely not as weak as it looks. Queensland and NSW both shifted back a week compared to 2017. If so should anticipate an October bounce. That’ll learn me for posting on a Friday night.

Sydney Airport commented on this in numbers posted yesterday, and were generally flat in September, which I missed. Sydney also provide good numbers on international passengers which confirm some trends in the recent ABS stats:

Sydney September

Some quick graphs on O/S A&D

Overseas Arrivals & Departures data from ABS this week. Commentary:

International arrivals still growing; QLD gets its mojo back while Tassie slows

Qld “gets its mojo back” on international visitors

Tourism is still booming, but not just from China

Again, more questions than answers. While annual short term visitor growth to Australia remains positive the growth from China has slowed significantly while the holiday category has flattened and turned slightly negative on rolling annual growth, down 1.9% on the previous year.

ADAug1

All categories rolling annual growth for major states with WA at the bottom omitted from the legend:
ADAug2

This is curious because the holiday category is the strength of Queensland. Perhaps Queensland really is shooting the lights out on international holiday visitor share. It could be that the growth shift from China to the USA is more advantageous to the Queensland holiday product. Perhaps a Commonwealth Games effect has shown up.

The most interesting aspect here is that it was the purpose of visit data that was the problem for the International Visitor Survey and was withheld from the most recent edition. Since delayed again. TRA specifically cited the quality of the arrival card data. I can find nothing at ABS which indicates any problem with this data which is derived from the same source.

What goes around

While awaiting the September update from Cairns Airport the BITRE have updated national numbers for July. Top 20 airports summary growth for the year to July:

bitre july1

This time I have included Proserpine which has distorted numbers following the impact of Cyclone Debbie on the Whitsundays when it replaced Hamilton Island in the top 20. Monthly comparison with July last year:

bitre july2

Rockhampton is a bit of a mystery there and comes off the back of a big number the previous July so should probably be taken as an outlier. Launceston plays catch up with Hobart. Mackay and Karratha now up near the top.

BITRE post monthly numbers for the top 20. They only post annual numbers beyond that. So an annual comparison of passenger numbers for Proserpine and Hamilton Island:

bitre july3

The increased share at Proserpine was evident before Cyclone Debbie but now looks to be reverting somewhat again. This could come into play when we consider the Productivity Commission inquiry into economic regulation of airports. Not sure I can think of two such closely located airports servicing a defined market?

I only browsed a couple but Gold Coast inquiry submission was emphatic that airport competition was more significant in SEQ. The BITRE top 20 airports by state comprises Queensland (8); NSW (3); WA (2); Tas (2); NT (2); Vic (1); SA (1); ACT (1). Karratha is currently #20 and Broome also lurks at #21 ready to pounce.

Meanwhile the numbers at Cairns continue to look a bit lame.

Parsing the pokie cycle

It’s monthly EGM (pokie) stats time again in Queensland. In September the Cairns SA4 region continued to outperform the state in losing money. I will leave the internal local data for now and look for broadly at Queensland regions.

This is growth in EGM win/loss for the September quarter over the last two years:

SA4                              1 yr %              2 yr %
Central Qld                  7.6%               4.4%
Cairns                           7.2%                8.2%
Mackay                         5.9%              18.7%
The Bush                      4.4%                7.6%
Outback                        4.1%              12.8%
Townsville                   3.9%                6.1%
Queensland                 3.0%                5.9%
Greater Brisbane        2.8%                5.6%
Sunshine Coast           2.8%                4.6%
SEQ                                2.3%                5.1%
Wide Bay                     1.8%                 3.5%
Downs Maranoa         1.7%               10.8%
Gold Coast                    0.7%                3.6%
Toowoomba                -0.7%               1.1%

SEQ = Greater BNE + Gold Coast + Sunshine Coast; The Bush = Queensland – SEQ

Maybe graph that for context. September quarter 2018 growth over the previous 2017 year:

Regiinal Pokies

Yes, everything above the Queensland average is to the north. This also applies to Outback (including Cape York) and my derivation of The Bush which are both weighted to the north in population.

There are lots of factors influencing these numbers at various levels however it’s difficult not to discern a predominant cyclical economic component. Mackay and Central Queensland in particular are both recovering from previous falls. The data posted by OLGR is only for the past three years.

Note: Mackay growth is also coincident with declines in both venues and operational EGM’s over the period. These numbers have increased in Cairns over the same period.

Note2: This is not intended as positive comment on pokies. This can be both a positive indicator of discretionary spending and at the same time an economic and social negative. These are not contradictory.

Previous Posts:

Kachink Kaboom;

Pokies hold down Reef Casino

Douglas pokie boom

Just saying ………

Bill Cummings presented his annual review of the region’s economy to the Cairns Chamber of Commerce on 24th July 2018:

Growth of the region’s tourism sector with earnings now over $3bn was strongly checked, 2008 to 2014, by the GFC and extremely high Australian dollar causing a retreat of over 20%. But this has been followed by a strong recovery back to record levels following the drop in the dollar. However, there is evidence that the strong upward movement has tended to slow over the past 12 months.

Let me warn everyone however, not to read too much into short term movements in the International Visitor Survey and the National Visitor Survey.
They are based on sample surveys and at regional level, statistical variance can lead to them not accurately reflecting short-term movements.

Airport passengers that account for the bulk of visitors can be more reliable. Over the year, international terminal traffic is up; domestic terminal traffic growth has slowed.

NVS comparison

 

The problem I have is that there are always more questions than answers ……