Major Challenge to Our Region's Future; Employment Will Suffer in the Fallout of Global Economic Crisis
Byline: BUSINESS INSIGHTS Prof Ian Eddie
SINCE the global financial crisis engulfed the world economy governments around the world have injected trillions of dollars into the global economic system, with the aim of stabilising declining economic growth, increasing demand for consumer goods by providing direct cash payments to families and individuals, and by announcing massive infrastructure projects.
In addition, central banks around the world have slashed interest rates to stimulate business and individual investment in new plant and equipment, housing and corporate real estate.
Despite these attempts to stimulate economic activity, increases in unemployment are forecast over the next 18 months in all major world economies.
Australia's unemployment rate is around 4.8 per cent, but this is forecast to rise to between 6.5 and 7.5pc by early 2010. Australia's forecast unemployment is relatively good when compared with the rest of the world.
In the US, unemployment is expected to be over 8.8pc by the end of 2009, with many cities and regions expected to have unemployment rates above 10pc. Europe will fair even worse, with average unemployment across the European Union over 11pc by the end of 2009 and some countries, such as Spain, with forecast unemployment of above 15pc.
The issue of rising unemployment will loom as a major challenge to our region's future economic growth. The most recent data published by the Department of Education, Employment and Work Relations for the Hunter and North Coast over the period from September to 2007 to September 2008, was that total employment in the region fell from 508,800 to 498,500, representing a 2pc decline in total employment.
This decline in the number of jobs in the region occurred when much of Australia was experiencing jobs growth. Over this same period the unemployment numbers increased from 24,700 to 29,400, representing a 19pc increase in unemployment.
This brought the regional unemployment rate up from 4.6 to 5.6pc, which is the highest rate of unemployment for a regional area in Australia.
The above data places the Hunter-North Coast region in a very poor position going into the current economic slowdown. …