QLD 'could lose 40,000 jobs by mid-year', warns UDIA

The Urban Development Institute of Australia (UDIA) has issued dire predictions for the state's economy, as the effects of economic stimulus measures wear off.

Its Development and Construction Industry Performance Report for 2010 warns up to 26,000 construction jobs, 13,000 retail jobs, $4 billion in turnover and $490 million in government revenue could disappear in Queensland by July 2011.

Without further government stimulus measures, 12,700 fewer dwellings would be built next year, with devastating flow-on consequences, it says.

The predictions will be sobering reading for Premier Anna Bligh, who promised at the last election to create 100,000 new jobs before voters go back to the polls in 2012.

Bligh played down the report on Tuesday.

"There's no doubt the construction industry in Queensland has been doing it very tough," she told reporters at the building site of Brisbane's Airport Link Tunnel on Tuesday.

"That's why as a government we've been so determined to keep our building program going.

"We're running the biggest building program in Australia and what it is doing is offsetting job losses out of the private construction industry.

"If it wasn't for our ... building program in Queensland, unemployment would be 10 per cent.

"We are on track to meet our jobs target."

UDIA Queensland president Warren Harris said the December issue of the institute's quarterly research report presented a bleak view for the year ahead.

"Queensland was shocked by the GFC in 2008 and recovered with the aid of Commonwealth stimulus but has now dropped again to levels only seen with the introduction of the GST in 2000, or in 1987 before that," Harris said in a statement.

"Overall southeast Queensland private sector dwelling approvals have now declined to 40 per cent lower than the averages of the period between 2006 and 2008.

"Housing starts, which are always a later indicator of trends, have now dropped too - 25 per cent in the last quarter alone."

The Development and Construction Industry Performance Report relies on key industry data from the Australian Bureau of Statistics, including data on industry activity, underlying demand, finance and employment.

Harris said there was an inherent lag between drops in housing approvals and when those declines flowed through to employment figures.

He cautioned against an unduly optimistic reading of the latest increases in industry employment.

"The short-term recovery in approvals that was driven by the Commonwealth stimulus program for first-home owners and social housing is only now fully flowing through to the latest employment data," he said.

"Unfortunately, it is the natural order of the industry that building approvals predict employment rates. If approvals are down, it is a matter of time before the consequences registers in the employment data.

"If the current low approval levels are allowed to continue well into next year, the industry, and the broader economy, will be facing massive losses.

"Queensland will have 12,700 fewer dwellings built and, based on standard multipliers, will face a loss of $4 billion in turnover and 26,000 in full-time construction jobs."

Government would also lose $490 million in state and federal revenue, Harris said.

He said the flow-on effects of the predicted dive in construction would be vast.

"It is estimated, for example, that there is roughly one job in retail lost for every two construction jobs. So 26,000 jobs lost in construction would mean 13,000 lost in retail," he said.

"In the context of these very real possibilities, we are hopeful that the government's resolve to tackle our industry's downturn will be further strengthened."