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Economists predict rough 2017 for SA

AAP logoAAP 16/12/2016 Marnie Banger

South Australia is headed for sluggish growth and more unemployment in 2017, on the back of a year that was both good and bad, economists say.

University of Adelaide economists have released their final SA-focused Economic Briefing Report for 2016, which predicts long-term unemployment and underemployment will hit record levels in 2017.

The team says international exports were a "bright light" in 2016 as they rose by 11 per cent compared to 6.7 per cent nationally.

And while the exports tapered off through the middle of the year they could grow again over the summer because of impressive agricultural crop yields.

SA Centre for Economic Studies Director Michael O'Neil says household and government spending experienced solid growth, with the gross state product - the total market value of goods and services - rising by 1.9 per cent.

But business investment fell, as a result of sharp drops in mining and manufacturing, less construction work on the Royal Adelaide Hospital and a broader national trend.

"Given the rather slow economic conditions we're seeing internationally and nationally, it's not surprising that the South Australian economy has continued to post fairly subdued growth rates," Professor O'Neil said.

He said there were some employment improvements in 2016 but 2017 could bring more challenges, particularly with the closure of Holden's car assembly plant.

The centre forecasts the jobless figure will drop to 6.5 per cent in 2016/17, compared to 6.8 per cent in 2015/16, but revert to 6.8 per cent in 2017/18.

"We expect that employment growth will be sufficient to keep pace with population growth but it won't be sufficient to bring down the unemployment rate," Prof O'Neil said.

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