The ACT economy is growing strongly. Businesses are hiring and the unemployment rate is low. Our service exports are expanding, creating a more diverse economic base from which to grow good local jobs.

Economic outlook

The ACT economy grew by a strong 3.4 per cent in 2015-16 and is expected to remain at a high 3¼ per cent growth in 2016-17 – well above the forecast national average of just 1¾ per cent growth. Strong growth in the ACT is also forecast to continue over the years to 2020-21.

We are seeing growth across most areas of the Territory economy, with high value added services, like university education for international students, expected to perform well. More traditional economic sectors – such as housing construction and retail trade – are also growing rapidly.

Stronger growth means more jobs being created. Over the last 12 months we added over 3,200 new jobs in Canberra, with strong employment growth forecast to continue over the next four years. Importantly, these jobs are being added in a diverse range of sectors including construction; intelligence; ICT; space and spatial technologies; cyber security; education and research; defence; tourism; and retail. Strong projected jobs growth means our unemployment rate is also expected to remain low, around its current level of 3.6 per cent.

Canberra’s population has also grown rapidly. Over the past 12 months almost 6,000 more people came to call Canberra home. By 2020-21, the ACT’s population is expected to reach over 428,000, or an additional 30,000 people. That’s about eight new suburbs’ worth of people we need to plan for with housing, infrastructure and services so that we protect Canberra’s liveability as we grow.

Risks

This positive growth outlook comes with a few storm clouds on the horizon. The increase in the Commonwealth Government’s latest efficiency dividend will begin in 2017-18, cutting budgets across the Australian Public Service. In addition, the Federal Government’s push to relocate Commonwealth agencies to other parts of regional Australia would see the loss of thousands of jobs and billions in local spending if this meant moving offices out of Canberra.

2017-18 Budget Economic Forecasts (Percentage change)

 

Actual 2015-16

Estimate 2016-17

Forecasts 2017-18

ACT

   

Gross State Product

3.4

3¼ (+1)

2¾ (+¼)

State Final Demand

2.9

5 (+2)

3¼ (+¼)

Employment

1.8

Wage Price Index

1.9

1¾ (-¼)

2

Consumer Price Index

0.8

2½ (+½)

2 (+¼)

Population

1.3

Australia

   

Gross Domestic Product

2.6 (-0.1)

1¾ (-¼)