Queensland's strong economic performance is expected to continue in the coming financial year, although the composition of growth is likely to change markedly.
Forecasts contained in the state Budget papers show gross state product (GSP) will expand by 4.25% in 2004/05, up from 4% this financial year.
However, the key drivers of recent growth - household consumption and dwelling investment - are projected to slow significantly.
After expanding by 8.5% in 2003/04, growth in household consumption is predicted to slow to 4.75% in the year ahead, reflecting an easing in the growth of both housing-related consumer purchases and wealth-related spending, in line with the apparent peaking of the housing cycle and the recent stabilisation of house prices.
Similarly, dwelling investment is forecast to stall in 2004/05 after growing by 12.5% this financial year, 20.8% in 2002/03 and 32.9% in 2001/02.
Offsetting these falls, business investment is forecast to expand by 8.5% in 2004/05, up from 6.5% this financial year, but down on the 30.6% growth recorded in 2002/03.
Strong growth is predicted for investment in buildings and structures (up by 5% in 2003/04 and 10% in 2004/05) and machinery and equipment (up by 7% in 2003/04 and 8% in 2004/05).
On top of this, growth in public final demand is projected to strengthen to 5.5% in 2004/05, up from 3% this financial year, largely reflecting the state government's substantial infrastructure investment and increased capital expenditure by government-owned enterprises.
In line with national forecasts, export growth is expected to firm in the coming financial year, increasing by 5%, following growth of 3% in 2003/04. However, 6% growth in imports is forecast to result in net exports detracting one percentage point from overall growth in 2004/05, down from 5.25% percentage points in 2003/04.
Inflation, meanwhile, is predicted to remain under control, increasing by 2.5% in 2004/05, down from 3% in the current financial year; while growth in average earnings is expected to increase slightly to 4%, up from 3.5% in 2003/04, despite a moderation in employment growth to 2.25% (3.25% in 2003/04). Unemployment is forecast to remain at 6.25% over the year, above the national rate of 5.75%.