COMMSEC chief economist Craig James foresees positive trajectory for South Australian economy driven by strong business investment.
The city economy has enjoyed positive market conditions leading to rapid growth in development and investment. Historic peaks in confidence across the property sector, economic growth expectations and economy management throughout 2018, the roll out of revolutionary high-speed and high-performance fibre optic data network Ten Gigabit Adelaide have been driving factors in luring domestic and international investment.
“SA is among the optimists in Australia at the moment, rather than the pessimists,” he said at the Australian Institute of Company Directors’ directors’ briefing at the Adelaide Convention Centre last week.
“The state is producing good growth, and the main reason is the business sector is investing in a big way across the SA economy.
“There’s $12 billion worth of projects under consideration in SA at present, so there’s plenty of opportunities for SA in terms of growth.”
Tourism has gone from strength to strength with statistics from Tourism Research Australia revealing more than 2.7 million domestic travellers flocked to the city of Adelaide from September 2017 to September 2018. Domestic tourism contributed a record expenditure of $2.3 billion, while 395,0000 international visitors spent $966 million. Chinese visitors led the way with a fifteen per cent increase in spend, totalling $426 million however Mr James sees a further surge in demand on the horizon.
”China isn’t just buying our goods, they’re coming to our shores in a big way,” Mr James said.
“There’s 1.38 billion people in China and a fair proportion still haven’t got their overseas passports, so the opportunities for Australia are quite remarkable.”
The increasing demand has been recognised with China Southern Airlines increasing direct services from Guangzhou to Adelaide from three flights per week to between five and seven as of February 2019.
As housing markets across the eastern seaboard face uncertain times, Adelaide remains secure and one of the most affordable amongst capital cities. The ANZ/Property Council Survey reported in October 2018 that South Australia was the only state to record an increase in the expected rate of house price growth in the coming 12 months.
“Falling home prices are more of an issue in Sydney and Melbourne,” he said.
“Adelaide is very stable, it’s not going through the roof or the floor.”
Quotes from SA economy in a good position, CommSec chief economist Craig James tells AICD event by Paula Thompson, originally appeared in The Advertiser 1 April 2019.