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Queensland held back by China's trade freeze

Business

China is weighing heavily on Queensland’s exports and its economy, according to an analysis by the ANZ Bank.

 

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The banks said tensions between China and Australia and the slowdown of the Chinese economy impacted Queensland’s exports in the second quarter of the year.

“The state’s merchandise exports to China were down nearly 51 per cent year on year in the second quarter, the steepest contraction since the 1990s,” the report said.

“Trade with other regions lifted, though that was not enough to offset decline of exports to China. Overall, merchandise exports contracted 3.7 per cent year-on-year in the second quarter.”

Westpac also pointed out today that Queensland was the only state left that could drive the recovery in wages with NSW and Victoria in lockdown.

“Fortunately, the Queensland labour market has had the strongest recovery out of the COVID lockdowns of 2020,” Westpac economist Justin Smirk said.

He said wages growth would probably be about 3 per cent had it not been for the lockdowns.

Queensland’s official wage growth is 1.7 per cent, fractionally behind NSW and Victoria.

ANZ said the state’s economy was still strong in the second quarter, helped by “robust consumer and labour” segments.

Employment was 3.3 per cent above the pre-pandemic level in July and was consistently outperforming the national average.

But business spending is the laggard and fell from the previous quarter. Non-residential business approvals fell 12.8 per cent, the steepest across all states and territories.

It said Queensland was still a magnet for interstate migration and this would create more demand for goods and services and broader economic growth.

 

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