Business

There's no denying economics in predicting Gladstone bust

LAST week's article about what boom workers will face when the stream of money ends was intended to alert people to what will happen in Gladstone, not what might happen.

It caused a measure of angst among some readers who, in their responses, indicated unfortunately that they are in denial.

Think of what happens with your barbie. Inert gas from a bottle is ignited by a spark and the gas becomes usable fire.

Economics is all about responses to stimuli which, like that spark, become catalysts.

In Sydney house prices rose by 14% last year, Melbourne 10%, Perth 9% and Brisbane 5%.

The question is why and the answer lies in the catalyst. In trying to bring the value of the dollar down, encourage consumer spending and avoid another "recession we had to have" the Reserve Bank has installed historically low interest rates.

That's been the catalyst and it has worked: house and unit construction is now at eight-year highs and the dollar is nearing where it should be. 

You don't have to be Einstein to recognise the catalyst that has seen Gladstone property prices fall by 9% in the December quarter alone.

In economist-speak, house prices are a leading indicator: they in effect predict future economic developments.

On the Gladstone situation, think of a clock we'll call the Gladstone clock - no different to the Newcastle or Wollongong clocks more than half a century ago, for example.

Looking at Curtis Island, what has happened is that a resource has been found for which there is a market: recoverable coal seam gas, which needs a catalyst to convert it into liquid form and a port from which to export it.

That's our start point at 12 o'clock. From 12 o'clock to 1 o'clock, we have the planning and approvals stage for the building of the facilities needed in the process.

Then comes the high-cost construction phase from 1-9 o'clock, then the mature construction phase or construction denouement from 9 o'clock to 11 to be followed by the maintenance, operational and management phase taking us to 12 o'clock and onwards.

My point is that what is happening on Curtis is that LNG production start up is nearing and the labour-intensive construction phase is hurtling toward completion.

According to announcements reported to have been made recently by the major construction contractors, the construction phase will finish by mid-year. We are quite a bit past 9 o'clock on our Gladstone clock.

Commendably, these employers of huge numbers of workers are trying to get the message through that the fat lady has begun to sing. 

Like Newcastle and to a lesser extent Wollongong, Gladstone has a bright future. It adds value to bauxite, it has become the gateway for central Queensland thermal coal mines to Asia, and it is about to add value to coal seam gas.

In fact, it is and will remain a cornerstone in our state's future economic wellbeing. All the city has to fear are the vagaries of global pricing for its exports - and that's a cyclical thing over which it can have no direct control.

That said, the frenetic boom days for workers here are nearing an end. Estimates I have read indicate that only about 500 workers will be required by each LNG producer in the maintenance, operational and management phase.

Bob Lamont is director of Corporate Accountants situated at the Night Owl centre. He can be contacted on boblamont1947@gmail.com.

Topics:  bob lamont curtis island economy gladstone business lng



Foodies' scavenger hunt: are you up for it?

IF YOU want to give your tastebuds the flavour sensations of a lifetime, here is the ultimate foodie’s scavenger hunt through Brisbane.

5 minutes with Israel Folau on footy, life and love

Israel Folau and Silver Fern netballer Maria Tutaia announced their engagement last last year.

WE CAUGHT up with football star and Brisbane ex-pat Israel Folau.

10 reasons to head to South Bank this summer

Head to the only inner-city beach in Australia!

South Bank has a ridiculous amount of fun things to do.

Five mammoth events you need in your life

No Caption

BRISBANE isn’t known for doing things by halves…

How to make your child's every dream come true...

Take a dip at South Bank in the inner-city beach.

‘I DON’T want to do fun things, Mum and Dad’… said no child ever!

How to do Eat Street the right way

Know where to start and where to end to avoid a huge food coma before you get to experience all the goodies!

EVERY Friday and Saturday night, Hamilton comes alive.

You can do WHAT in Brisbane?!

Talk about arriving in style! Take your pub crawl to the next level with a helicopter!

BET you didn't know you could do these things in Brisbane...

NEW FIGURES: Thousands on the hunt for more work in region

New figures reveal how many people were unemployed last month.

'Game changer': Gladstone businesses take in $600k from job package

Glenn Butcher MP.

Gladstone businesses sign up for work package boost.

LifeFlight makes 21 lifesaving missions across Gladstone

A rescue chopper attends a drowning at Seventeen Seventy, north of Agnes Water, in March of 2016.

Every second counts when saving lives, says LifeFlight boss

Local Partners

NEW FIGURES: Thousands on the hunt for more work in region

AS GLADSTONE begins to even out after a tough 12 months, the latest jobs figures showed there were 7500 people who are unemployed throughout the region.


New Year New Yard

Win $1000 Bunnings Voucher
Learn More

Puppetry of the Penis secrets revealed ahead of show

The famed Puppetry of the Penis is coming to the Sunshine Coast for shows in Noosa and Caloundra.

WARNING: This interview contains adult themes and traces of nuts

Noll meltdown won't affect Gympie Oz Day concert

Shannon Noll

Photo Contributed

Shannon Noll is still expected to perform in Gympie next Thursday

11 huge events coming to Gladstone in the next 6 months

Events coming up in Gladstone in 2017.

Your guide to exciting events coming to the Gladstone region

Jennifer Aniston wants to return to TV

Jennifer Aniston is desperate to make a return to TV

Madonna hopes for election unity

Madonna hopes Donald Trump's election will "bring people together"

JK Rowling rules out Cursed Child trilogy

JK Rowling has ruled out a 'Cursed Child' movie trilogy

Buckley's chance in psychological thriller

James McAvoy and Betty Buckley in a scene from the movie Split.

Broadway veteran back on big screen with James McAvoy

Daniel MacPherson: acting’s a bit like channel surfing

Australian actor Daniel MacPherson in a scene from the American TV series APB.

THE Aussie export talks about making his mark in the US.

Shopping isn't fun if you can see dead people

Lisa Marie Woodham will be giving readings in Gladstone until Saturday January 21.

Shopping isn't fun if you can see dead people

By the water's edge

Secure your seachange

Gladstone market's confidence coming back for 2017

Core Logic property statistics reveal the region's median house price dropped 16.7% to $275,000 in the September quarter.

Region's median house price drops 16.7% to $275,000

HOT PROPERTY: Money to spend on land, buildings

File picture.

Sale, leasing of industrial real estate picks up in Mackay

Collapsed Coast company could owe up to $5 million

Staff, ATO, landlords among those out of pocket.

Ipswich block of dirt sells for $582 a square metre

JUST SOLD: A property on the Brookwater golf course sold for a record-breaking $612,000.

Property smashed 2007 record by close to $100,000

Ready to SELL your property?

Post Your Ad Here!