Saturday, May 12

Is Tasmania in the midst of a recession?

This week's unemployment figures for the Apple Isle, which have soared since September 2011, had me wondering: Is Tasmania in the midst of a recession?

One definition of a recession is a 1.5 to two percentage point increase in the unemployment rate over 12 months. Tasmania is well and truly in this territory. Its unemployment rate increased by more than three percentage points (seasonally adjusted) in the past 7 months. The trend series has grown more than two percentage points over the same period.

Since October 2011, we have seen a substantial slump in the number of people in jobs in Tasmania. The number of people working now matches the depths of the global financial crisis.

Seven thousand jobs have left the Tasmanian economy in 2012.

The people in jobs to population ratio has been declining since the GFC.

These figures are on the back of the longest slump in real retail turnover since (at least) 1983. From Q1 2010 to Q2 2011 (inclusive) Tasmania experienced six quarters of negative growth in trend real retail turnover. The current rate of through-the-year real growth remains anemically below trend.

House prices are substantially down in Hobart town.

Motor vehicle sales, another barometer of economic activity, are also in decline. It looks like Tasmanians are buying 400 fewer vehicles each month compared with a couple of years ago.

This decline in vehicle sales is out of step with the rest of the county.

Another indicator of Tasmania's plight is the slow down in dwelling unit approvals. Each month, Tasmania is approving fewer units than it did anytime since 2003.

And, at the last print for Q4 2011, through the year growth in state final demand for Tasmania was negative.

Unemployment is up. Retail turnover, house prices, motor vehicle sales and building approvals are all down. I think we can safely conclude, all is not well in the state of Tasmania.

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