Australia | Sep 06 2010
By Greg Peel
National Bank economists have been globe-trotting of late. Well, nation-trotting anyway, but Australia is a big place. So big in fact that anywhere outside of the populous south-east corner of the country can seem a world away in more ways than one.
Geraldton on the west coast is the gateway to the Carnarvon Basin. The mood in this town is “pumped”, the NAB correspondent suggests. A new port is to be built and land values are going through the roof. A Rio Tinto employee brags that his property up the road in Carnarvon has appreciated by 700% in seven years. He rents it out for $2500 a week. A Geraldton builder with a project in Karratha needs to spend $2-3m on workers camp because there's not enough existing accommodation.
SkyWest is the local carrier of choice for mining companies and their fly-in, fly-out workforce. It has run out of capacity and is in the midst of a large expansion. The unemployment rate in Perth is 4.4%. Bank employees are leaving jobs paying over $100k to train as truck drivers in the Pilbara.
In Perth, a cup of coffee costs $4.50.
Roma is in Queensland near the southern tip of the Bowen Basin. Here the unemployment rate is 2%. Local sentiment is buoyed by the mining and oil & gas industries. If you want a plane to Roma or a motel room when you get there, be sure to book well in advance. Unless you're only going for the weekend.
While one might not expect the good people of Roma to be overly focused on world financial affairs, questions put to the NAB correspondent are dominated by the outlook for the US and Chinese economies. On the local front, negativity is reserved for talk on the mining tax.
Some 200km west of Roma is St George. Here the local water storages are at full capacity and agriculture is back in business. Even the cotton farmers are on a winner.
Alice Springs is basically in the middle of nowhere. But in true outback Australia, the middle of nowhere is about as close as you get to the likes of the Simpson and Cooper Basins. The NAB correspondent expected a sleepy tourist town, but instead was overwhelmed by the number of businesses supporting the mining and agricultural industries along with property, service and supply companies.
House prices in The Alice were up over 22% in FY10. They're up nearly 50% in four years. A shortage of land and development means the average house price now matches that of Adelaide, and is not far behind Brisbane.
Down here in the south-east corner, homeowners wake in a cold sweat wondering whether or not the RBA may put its interest rate up again.
