Townsville economy will weather mining downturn: Terry Ryder

Townsville economy will weather mining downturn: Terry Ryder
Townsville economy will weather mining downturn: Terry Ryder

It’s a marvel that Australia has any regional cities left.

Every time there’s a major (and sometimes relatively minor) business reversal, media declares the death of the local economy and often the collapse the local property market.

Legendary author Mark Twain could have been speaking for Newcastle, Wollongong, Geelong and many other regional cities when he said that “the reports of my death have been greatly exaggerated”.

The latest Australian regional city to inspire a premature obituary is Townsville in the wake of the decision by political and business buffoon Clive Palmer to shed 237 jobs at his Queensland Nickel refinery. 

As has become common in the wake of such events, the media coverage has been a tad over the top since the announcement. I’ve seen reports predicting devastation of the local economy. One suggested Townsville would become “a ghost town”.

Admittedly some of the dire forecasts have been sourced from sacked workers who were understandably emotional.

But beyond the unfortunate impacts on the affected families, the downsizing of the Queensland Nickel business is not a catastrophe for Townsville.

The northern Queensland city is one of Australia’s strongest regional economies. It has wonderful diversity, with a broad range of strong industry sectors providing employment and economic activity.

It has a major (and expanding) military presence, a massive government sector, a significant education industry, a busy tourism industry and various activities related to the resources sector, among others. 

Few Australian regional cities can match it for strength and diversity.

A couple of years from now the Queensland Nickel kerfuffle will be seen as a minor blip in the economic life of this very strong city.

Townsville is not the first regional economy to be declared terminal and it won’t be the last.

Last rites have been administered in recent years to both Wollongong and Geelong, which nevertheless remain very much alive and kicking.

Wollongong was proclaimed an impending basket case when Bluescope Steel announced some major downsizing in 2011. Media went overboard. I recall one headline predicting that property values would fall 50%.

But something quite different occurred. The Wollongong property market has recorded strong price growth in the years since, partly because it caught the wave from Sydney and partly because of positive events in the local economy. 

What the doomsayers overlooked when they over-reacted to the Bluescope Steel job cuts is that there are a lot of  other things happening in Wollongong besides the smokestack industries. Like many other regional cities, Wollongong has been busily reinventing itself and these days has strong industry sectors in education, IT and tourism, among others.

The gradual decline in employment at the steelworks has been going on since the 1970s. Back then, Bluescope Steel employed 27,000 people. Today it provides jobs to only 10% of that number. In the meantime, Wollongong has moved on and created new modern industries to sustain itself.

It’s doing just fine.

So is Geelong, although it should have shuffled off this mortal coil before now, in the wake of bad news about the Ford car plant and one or two other old-style industries. 

But, like Wollongong, Geelong isn’t a blue collar factory town any more. Its biggest employment sectors are eduction and health. The city is thriving as an affordable lifestyle alternative to Melbourne, to which it is now better connected since the completion of the $5 billion Regional Rail Link.

Major new enterprises are opening up in Geelong. One is the National Disability Insurance Scheme, which is being headquartered in Geelong and is attracting other enterprises that want to be located near it.

In real estate terms, Geelong is the strongest market in regional Victoria and I don’t expect that to change any time soon.

There are echoes in this situation also of Newcastle, which was expected to wither and die following the closure of BHP activities in the late 1990s. But check it out today and you’ll find a strong and vibrant city where spending on new infrastructure and property developments totals many billions of dollars. 

And so it will be with Townsville. I’m sure those 237 people who are losing their jobs are suffering (I’ve experienced retrenchment a couple of times in my life and it’s not pleasant) but Townsville as a community and as an economy will not be devastated. 

We’re talking 237 jobs in a city of 200,000 people. Even allowing for flow-on effects, Townsville’s future is as strong as ever.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

Tags: 
Townsville Property market

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