South Australia’s economy is undergoing structural change brought on by the decline in manufacturing and more job losses are yet to be felt, an economist says.
Figures released this week showed SA’s unemployment rate had hit a 15-year high, at 8.2 per cent – the worst in the country.
Director of the University of Adelaide’s Centre for Economic Studies Michael O’Neil said the demographics worst hit by job losses showed that the decline in manufacturing was a major factor behind the state’s unemployment rate.
“There’s been some 6,200 positions in male full-time employment that have disappeared and when we look at the unemployment, we see an increase in male unemployment of about 8,400 since January,” he said.
“Female unemployment rates have been relatively steady so the real stand out factor is the deterioration in male full-time employment.”
Mr O’Neil said that trend was likely to continue as more jobs were shed, both in manufacturing and mining.
“I don’t think we’ve felt the impact of Alinta at Port Augusta and Leigh Creek which again would be a lot of male full-time employment,” he said.
“But generally I think what is lying behind this underlying trend is the structural change in the South Australian economy and it is that era of manufacturing, some sectors of manufacturing that are losing male full-time employment.”
Projects need to be brought forward
Mr O’Neil argued bringing forward infrastructure plans would be one way to halt the jobs losses.
“Nobody’s answered the question, where are we going to get growth from? Where are we going to get private investment? And in South Australia we’re talking about projects often that are 10 or 15 years out,” he said.
“Tram lines along North Terrace, 15 years out. I think we need to start bringing some of these forward.”
South Australia has got some emerging and real strengths in food production and processing, food manufacturing, food exports.Michael O’Neil, economist
Mr O’Neil said one of the most critical areas was private investment, and the Government needed to do more to attract it.
“The world is awash with money but the demand is weak in the Australian economy and private sector investment is weak,” he said.
“If the economy could put up large-scale projects they could invest in and get a reasonable return, then funds will flow to those so the Government does have a role in that.
“What are the potentially significant projects in South Australia that will lead to employment, improve our productivity and draw in private investment and that’s the critical question to answer.”
Submarine decision ‘critical for South Australia’
Mr O’Neil said it did not just come down to the State Government.
He said the Federal Government also had a role, especially when it came to defence spending.
“I think also what will be critical, very critical for South Australia is the Commonwealth decision about where the submarines will be built.
“I think there would be very significant political fall out if they’re not built in South Australia but my view is they should be built in South Australia because we do have very strong manufacturing skills.”