The NSW Treasurer, Mike Baird, has released his economic update for January, warning that the state faces economic uncertainty.

 

“The pressures felt from the global financial crisis and associated deleveraging will likely see a period of contraction in the financial services sector and job shedding.  Unfortunately at this time, NSW is more highly exposed to this sector than other states. And industries vulnerable to the relatively high exchange rate will also struggle if they cannot adapt,” he said.

 

However, Mr Baird said, some key economic indicators showed that activity in NSW finished 2011 in better shape than it began the year.

 

“Retail spending has improved from mid-2011 and consumer and business confidence have also rebounded. Although more work needs to be done, it is pleasing that NSW created more jobs than any other state except Queensland in the second half of 2011.  With our Jobs Action Plan in place, businesses in NSW now have an incentive to grow.”

 

Figures produced in the report show that the employment participation rate had declined slightly, from 63.9% in August last year to 63.5% in December. Building approvals were 20.9% lower in December compared with December 2010.

 

The report is available here.