Key Learnings from 2018
With 2018 being so hectic, we’ve learnt to cope with the accelerated pace of doing business. While things are starting to look up, there are still a lot of challenges ahead. One such challenge is the housing credit squeeze. The availability of loans is shrinking, lending criteria have increased, and the savings requirements have risen. Already, the time to approve most home loans has doubled, from 30 to 60 days.
The Australian Prudential Regulation Authority (APRA) lifted its restriction on interest only loans and the Royal Commission into misconduct of the banking, superannuation and financial services industry are having an effect. The Commission’s final report will be delivered in late February. In short, it has become more difficult to borrow for a house.
Housing construction, whether buying, renovating or building a residence, provides a lot of work for small businesses, from plumbers to architects, hardware to furniture stores. When loans are hard to come by, the housing sector slows down affecting those supplying goods and services.
It has a direct impact on the supply chain and a knock-on effect on everything else.
The number of building approvals in Townsville remains low in comparison to Cairns or Mackay. However, some $2 billion worth of projects are about to start, including the Port expansion, James Cook University’s Master Plan, Sun Metals’ expansion, and military constructions.
The good news is that the region’s rate of unemployment is dropping, thanks to those projects. The bad news is that big projects starting off after a long halt have the perverse effect of lowering the number of small businesses. While it is hard to make a dollar and jobs are available, some small business owners choose to close up shop and go work for someone else instead, seeking a steady income and roster.
Mining is hiring again, and the pull effect is already being felt. After such a long downturn, it will take a while for employment and business figures to normalise. It will take longer yet for the flow of money to even out.
During the second half of 2018, the Townsville Chamber conducted six round table discussions with members to keep abreast of issues affecting local businesses. Lack of suitable training and difficulties in finding good candidates were raised as an issue at each round table. This echoes the findings of a recent Australian Industry Group (AI Group) survey into employment in Australia. The survey points to ongoing challenges for education institutions to deliver employment outcomes.
Our local education institutions, JCU, CQU, TAFE and Tec NQ, produce excellent candidates. We just need more of them and we need them to stay in the region.
A copy of the APRA decision and the AI Group report can be found in the blog section of our website, townsvillechamber.com.au/blog