Tasmania’s economic sprint set to slow to a jog, says latest Deloitte Access Economics Business Outlook

Things were good, and they are still good, but they’re not as good as they were — so says the latest big-picture report on Tasmania’s economic performance.

Treasurer Peter Gutwein maintains that Tasmania is now a better place to live than ever before despite some sobering news in the latest Deloitte Acess Economics Business Outlook for Tasmania. Picture: LUKE BOWDEN

TASMANIA’S economic sprint will slow to a jog as worsening conditions in China hit exports and a tight housing market takes the shine off the state’s reputation as an affordable relocation option.

The latest Deloitte Access Economics Business Outlook report says Tasmania’s “sprint has been great — the best that the state’s economy has managed since before the global financial crisis with good population gains and rising house prices”.

“Yet we don’t forecast it to last as gains in [capital expenditure] by business, spending by governments and retail therapy by families are all expected to ease back.”

The report warns Tasmania needs to build more houses.

Victorians and Queenslanders, in particular, will continue to seek greener pastures in Tasmania as mainlanders cash in their high house prices, the report says.

“Tassie is getting more people in part due to the affordability of its housing,” it says.

“But unless enough new housing is built then prices will continue to outpace those of Sydney and Melbourne and potentially choke off some of the better population news of recent times.”

The rental sector is desperate for supply. And while building approvals have rocketed, housing starts are taking some time to catch up.

Deloitte says the boom is slowing in Tasmania.

“Things were good, and they are still good, but they’re not as good as they were,” it says. “Indeed, on the back of four or five years of better news, the recent moderation isn’t surprising. The same drivers that gave a boost to the Apple Isle are still there but they have softened a little.

“The very strong performance in exports and business investment plus better news on population and consumer spending combined to see relative strong performance through 2017-2018.

“While these drivers haven’t disappeared, they have softened.”

The report said the recent slowdown in exports is due to broader global conditions, with the slowdown in China — Tasmania’s most significant trading partner — explaining a large portion of this.

Tourism is expected to continue to grow if the Australian dollar remains low.

Several big projects will also provide stimulus, including the $300 million Cattle Hill and $280 Granville Harbour wind farms now under construction.

Treasurer Peter Gutwein said Tasmania was now a better place to live than ever before.

“(The latest) Deloitte Access Economics Business Outlook confirms that Tasmania’s economy has continued to perform strongly, supported by good population growth, household consumption, and public and private investment,” he said.

“This ... confirms that the state’s economic growth is expected to remain solid.”