Tasmanian economic growth stalling as virus looms

Important growth measure state final demand was flat in the December quarter in trend terms, ending 13 straight quarters of growth, according to trend terms Australian Bureau of Statistics figures.

While state final demand was unchanged in percentage terms, the quarterly estimate actually edged down by $2 million to $8.976 billion, compared to the previous quarter.

Government consumption spending increased by 1.4 per cent and household consumption spending increased by 0.7 per cent.

However, there were slides of 3.9 per cent in private investment spending and 2.6 per cent in public sector investment spending.

In four consecutive quarters, state final demand growth had fallen from 1 per cent to 0.7 per cent to 0.3 per cent to zero.

Premier Peter Gutwein said the figures showed Tasmania was maintaining its strong economic momentum.

"Over the year to December 2019, the Tasmanian economy grew the fastest of all the states at 2.1 per cent, in real trend terms," he said.

"At the same time, Tasmanian consumers are the most confident in the country, with the highest consumption growth in the country, at 2 per cent annual growth.

"The statistics clearly show that our plan is working, we have the fastest annual employment growth in the nation, and since coming to government, have created over 21,100 jobs.

"But we know there is more to do, which is why we are investing $3.7 billion into jobs creating infrastructure.

"And it's why we announced $50 million to develop a new hydrogen industry in Tasmania, and our plans to double renewable energy in our state to continue to grow our economy, and create even more jobs and opportunities for Tasmanians."

The national economy grew by 0.5 per cent in the quarter in seasonally adjusted terms and by 2.2 per cent annually.

"The economy has continued to grow and picked up through the year," ABS chief economist Bruce Hockman said.

"However, the rate of growth remains below the long-run average."

The first economic effects of the coronavirus outbreak will wash into the March quarter figures, potentially slowing the state and national economies.

Meanwhile, Tasmanian housing approvals continued a recent downward trend in January despite record and growing state population and housing shortages in some areas.

Approvals fell by 3.7 per cent to 237 in January and were 19.4 per cent weaker than in January 2019, according to trend terms Australian Bureau of Statistics estimates.

"The decline comes on the back of similarly concerning falls in business investment, international exports, job vacancies and the amount of building work completed," Shadow Building and Construction Minister Jen Butler said.

"It also comes in the context of delays to almost every major infrastructure project in Tasmania, a significant deterioration in the state's finances and the looming economic challenge posed by coronavirus."

The property sector was buoyed on Tuesday by the state government's plan to simplify the approvals process so homes could be approved and built more quickly.

The plan would include legislated timeframes for permits for energy, water and sewerage services and extra resources for the land titles office to allow faster release of titles to the market.

"The Property Council has been leading the debate on this issue for a number of years and it's fantastic to see the government adopting our plan," Property Council Tasmanian director Brian Wightman - a former Labor minister - said.

"Simplifying planning and building approval processes and releasing more land for development will result in more homes being built, more jobs being created, and, most importantly, more Tasmanians with a roof over their heads" Mr Wightman said.