THE South Australian economy will lag the rest of the nation for the next five years as it struggles to cope with the high Australian dollar and the lowest population growth in any of the mainland states. A new book called State of South Australia: Turbulent Times examines the prospects for the SA economy, concluding that unless miner BHP Billiton revisits the proposed expansion at Olympic Dam, economic growth will be slow.
It predicts SA's gross state product will grow by 1.4 per cent in 2012-13 and 1.6 per cent the following year.
"The prospects improve considerably if and when the Olympic Dam expansion gets under way,'' BIS Schrapnel chief economist Frank Gelber said in a chapter on the state's economic prospects. The book's editor, John Spoehr, said it was likely BHP would return to the expansion when commodity prices improved.
"The millions of tonnes of minerals that lay deep underground at Olympic Dam are not going to go away,'' he said.
Dr Gelber said the manufacturing and agricultural sectors, which together make up more than 15 per cent of the SA economy, were struggling to cope with the high Australian dollar. His expectation that the dollar would remain close to parity for the next three years was a "major negative'' for the manufacturing sector.
Population growth will be just 1 per cent for the next five years. "Poor perceived job prospects in South Australia are encouraging residents to move out of the state in search of work, dragging down population growth,'' Dr Gelber said.