Job market drying up as hard times hit
Initially attracted to the Northern Rivers by roofing work from the October 2007 hailstorms, Mr Ferencz and fellow roofer Teal Nippard decided to set up a business based at Byron Bay. However, over the last six months he has noticed work is drying up.
“It is a concern, but hopefully we will have enough work to see us through,” he said.
Mr Ferencz’s experience mirrors the ANZ Regional and Rural Quarterly report released yesterday. It found in the last six months business activity was subdued, with unemployment on the North Coast jumping to 8.3 per cent – almost double thenational average, which is now predicted to top 9 per cent by 2010.
The report said the rise in unemployment was the result of weak business conditions, with the value of commercial building approvals plummeting more than 20 per cent over the last six months.
Debt held by the region’s farmers also soared over the period to $365,000 from $148,000.
Making it harder for farmers and small businesses is that banks have refused to pass on the full three percentage point rate cut that the Reserve Bank has slashed from its cash rate since September.
Michael Johnson, owner of the New Olympic Motel in Lismore, said businesses were being ‘screwed’.
“It hardly seems fair that the cash rate has decreased by 1.5 per cent, yet our business loan rate has increased by 0.69 per cent. This is a difference of 2.19 per cent, or $20,805 per year on our loan,” he said.
ANZ Far North Coast regional manager Fiona Preston said the report warned people to prepare for the ‘extremely lean times’ ahead.
“Most of the commentary to date has been about the global downturn and that Australia was sitting relatively comfortable, but we are now moving into extraordinary challenging times. It will get harder before it gets easier.”
The dire news came the same day it was revealed Australia recorded its worst economic growth in eight years in the three months to September – and that is before the global financial and economic crisis first seriously hit Australia in October. The economy is officially teetering on the edge of recession, growing a mere 0.1 per cent. Most other developed countries, including the world’s biggest economy, the US, are already recession.
Southern Cross University adjunct professor Lawson Savery said unemployment, which had been edging closer to the national average, was likely to outpace metropolitan areas.
“Obviously the national economy is trending downwards exactly the same way as the international economy,” he said. “Unfortunately for rural areas it’s even worse because there are fewer opportunities than in metropolitan areas for people to find new jobs.”
Summer tourism will offer little relief to the area this year, as cash-strapped families were likely to holiday at home.
Prof Savery said the long-term effects of a sustained local downturn could be devastating if young people were forced to move to cities in the search for work.
It’s a story 21-year-old Trent Lynn, of Casino, knows all to well. After he lost his job six months ago, Mr Lynn thought he’d be back in the workforce within weeks.
“I never thought I’d still be unemployed by Christmas,” he said.
“People keep telling me there aren’t any jobs in this area, but I have family here and won’t be leaving.”