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

Topics:  bob lamont curtis island economy gladstone business lng

Death threat to mayor, hospital staff assault heard in court

Peter Midgely leaves the Gladstone court precinct after getting bail.

Peter Midgely made threats to kill former mayor Gail Sellers

'Big relief': Emergency service boost with $150K fire station

START YOUR ENGINES: First officers Danny Devers, Errol Noye, Jason Polzin, Judy Ferrari, Colleen Yarrow, David Kretschmer, Jeremey Banks and Ron Barker from around the region hold up their keys to eight new Yellow Rural Fire Trucks.

"We've got it now and we won't give it up”

Santos sales boost softens blow of slumping oil price

CLAWING BACK: Santos reports a strong third quarter position off the back of bigger sales out of GLNG.

Revenue from LNG sales was $US227 million.

Local Partners

Shannen Doherty reveals fear of dying in post on chemo

Actor Shannen Doherty shared this image of her lying in a hospital bed after a chemotherapy session.

Actor has been fighting cancer since 2015

Eddie Redmayne's stage fright on latest Harry Potter film

Actor Eddie Redmayne stars in Fantastic Beasts and Where to Find Them.

Actor felt like kid again when he got to film with a wand

Salma Hayek: 'Trump planted story because I turned him down'

Actor Salma Hayek is the latest woman who says U.S presidential nominee Donald Trump acted inappropriately.

Salma Hayek latest woman to accuse Trump of misconduct

Brisbane snake catcher shows who's the Boss

Brisbane snake catcher Julia Baker returns in season two of Snake Boss.

Hit show Snake Boss is back for another season

The Summer that Melted Everything

See what happens when you invite the devil to town

Leonardo DiCaprio nearly drowned while filming

Actor Leonardo DiCaprio

Oscar winner almost drowned in Galapagos

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?

Kiwi siblings snap up Dotcom mansion for $32.5m

The new toy company owners of the Coatesville mansion want replace any controversy with positivity and fun. Photo / Barfoot and Thompson

The trio paid $32.5 million for the property in June

Push to sell homes that flooded Gladstone's market

Suburban housing in Glenvale, Toowoomba, Friday, October 17, 2014. Photo Kevin Farmer / The Chronicle

URGENT push to cash-up first home buyers investing in Gladstone.

New $200 million development will create 580 jobs

Cassie And Josh with baby Alfie and daughter Andee. They have bought at new Lennox Head development Epiq.

Majority of new positions will be given to Northern Rivers locals

Cherrabah's mega resort plans axed

PLANS for a massive development at Cherrabah have been scrapped.

What our mayor thinks of the new draft SEQPlan

The plan to use the innovative technology as part of the new Maroochydore CBD was cemented on site today when Mayor Mark Jamieson and Envac Asia Region president Chun Yong Ha formally signed the contract for the $20 million underground waste collection system.

New plan accommodates Sunshine Coast Council's vision for growth.