In this edition of the Data Wrap we take a look at key data releases over the past couple weeks that provide insight into the recent performance of the South Australian economy. Topics include the latest labour market report, building approval activity and performance in merchandise exports.
Strong labour market conditions in South Australia over the year
South Australia’s labour market conditions continue to perform strongly over the year. ABS June 2018 Labour Force Survey indicate that the State’s trend employment rose by 2.3 per cent in the year to June 2018 (up 19,000 persons), largely due to rising full-time employment (up 11,300 persons).
The strong employment growth through the year outpaced the State’s increase in working-age population. This saw the employment to population ratio to be at 59.3 per cent in June, 0.1 percentage points higher than May and a full 1 percentage point higher than 12 months earlier.
South Australia’s trend unemployment rate steadied at 5.6 per cent in June, recording the lowest rate since its previous peak of 7.8 per cent in August 2015. Unemployment fell by 12.4 per cent (down 7,063 persons) in the year to June 2018, which saw the State’s unemployment rate to be 0.9 percentage points lower compared to 12 months earlier.
Meanwhile, South Australia’s labour force participation rate steadied at 62.8 per cent in June 2018, an improvement to the 62.3 per cent 12 months earlier. This was a result of larger increases in the State’s labour force through the year (up 12,000 persons), compared to the rise in the working-age population (up 6,600 persons).
Value of building approvals showing some signs of recovery
South Australia’s building approval activity in May 2018 had shown some signs of recovery. The total value of building approvals in trend terms increased by 4.0 per cent in May 2018, a welcomed recovery after recording falls over the preceding 6 months. This was largely driven by the reversal of trends in non-residential building approvals. The value of non-residential building approvals recorded a positive increase of 5.1 per cent in May after falling away in the previous months, contributing half of the total recovery in the value of building approvals. This was mainly boosted by activities in ‘other non-residential building’, ‘short term accommodation’, and ‘education buildings’.
Meanwhile, residential building activity continues to grow steadily in May 2018, following from its robust performance over the first quarter of 2018. The value of residential approvals were up 3.2 per cent in trend terms to reach a new peak valued at $312 million. Data on housing finance commitments for South Australia, another forward indicator of residential building activity, had also shown similar recovery signs. Loan commitments for the construction of dwellings or purchase of new homes in the 3 months to May 2018 were up 10.4 per cent, a welcomed improvement to the fall of 7.8 per cent a month earlier in the same corresponding period.
Continued sluggish performance in merchandise exports
South Australia’s merchandise exports in the 12 months to May 2018 was $11.6 billion, up by just 1.4 per cent compared to a year earlier. The sluggish performance was largely due to the continuing decline in merchandise exports to the US (down $334 million) mainly due to road vehicles, and to India (down $146 million) mainly due to wheat – detracting much from the growth in merchandise exports made to other destinations.