Strong economic growth tipped

Submitted 1/02/2010

www.southaustralia.biz

Treasurer Kevin Foley says the latest quarterly report by a respected independent economic think-tank forecasts strong economic growth for South Australia as the nation begins to emerge from the global financial crisis.

The Access Economics' Business Outlook December Quarter 2009 report says South Australia survived 2008-09 better than much of the rest of Australia and predicts solid output growth this financial year, and acceleration in growth to 3.7 per cent in 2010-11.

The report suggests strong population growth, including gains in the international students market, has formed the basis for healthy economic growth in 2009-10 and beyond.

It predicts South Australia will one day be a world class minerals producer, but in the interim the State's economic fortunes will depend more on manufacturing than on mining.

Mr Foley says the Access Economics' report highlights areas of concern that are shared by the State Government - particularly in motor vehicle manufacturing and in wine production, which has been hit by not only a wine glut but also a very strong Australian dollar.

"As two of our major export sectors, their difficulties during the financial crisis have had an impact on the State's economy," Mr Foley says.

Despite those difficulties, the report forecasts a strong rebound in international exports - up by more than 21 per cent in 2010-11.

The Access report's overall assessment of the State's economy is very positive: "... this is a state making a very good fist of those challenges.

"Overall business investment spending in South Australia has held up well in the past year, with relatively few businesses spooked at the prospect of spending on capex in South Australia. In part that is a recognition of the State's success in maintaining 'steady as she goes' growth...."

The Treasurer says coupled with the recent Australian Bureau of Statistics September Quarter figures for State Final Demand the outlook for South Australia is very encouraging.