Deloitte Access Economics director
Chris Richardson.

Deloitte Access Economics director Chris Richardson.

The cuts to the federal public service will hit Canberra much harder than Holden's much-publicised job losses will affect South Australia.

This comparison is made in an economic report to be published on Tuesday that predicts ''lean years'' ahead for the ACT.

The business outlook report by Deloitte Access Economics says job growth in the territory has stalled, the recent surge in residential building has run out of steam and house prices are heading down.

Director Chris Richardson said of 14,000 public service jobs in the pipeline to be cut, about 6000 of those could come in Canberra.

He said while Holden would shed up to 4000 jobs, South Australia's workforce was four times as large as that in the ACT.

''There may be twice as many jobs at risk in the ACT from public service jobs cuts as in the impact of the closure of Holden's car manufacturing operations in South Australia, while the latter state has almost four times the employment base of the ACT,'' the report says.

''Moreover, there are flow-on impacts here too, for example, business investment spending in the ACT is already on the slide while many Canberra private sector employees 'sell' to the public sector.''

Queensland was losing 14,000 public sector jobs but the state's workforce was 10 times the size of the ACT's workforce. ''So this is a genuine, big negative [but] it's not the end of the world,'' Mr Richardson said.

''The ACT is a more mature economy and by and large we're not expecting the Commission of Audit will lead to large second-round cuts.

''If you look ahead there are growing risks partly because the housing and construction downturn continues and, more importantly, because the public sector cut-backs finally start to bite.

''They are big, we're talking about problems that are bigger than Holden looms as a problem for South Australia, bigger than the state government public sector cutbacks in Queensland have been up there.''

The report says Canberra's economy is a tug-of-war between benefits of low interest rates and negatives due to public service cutbacks.

''Growth in the ACT may have slowed, but it remains reasonable,'' the report says. ''Yet the good news side of the equation is looking less flash than it was.

''In part that is because, in contrast with the nation as a whole, low mortgage interest rates are not coaxing more housing construction work from ACT homebuilders. Partly that is simply because, also unlike the rest of Australia, housing construction in the ACT has been marching to the beat of a different drum.

''Recent years saw a surge in residential building work in Canberra and it has only recently run out of steam.

''The latter is increasingly clear in the forward indicators - housing finance is falling, building approvals are doing the same, vacancy rates are continuing to climb, while housing prices are heading down rather than up.

''Not surprisingly, therefore, housing construction activity is already sinking, and those lower levels of building work may be evident well into 2015.''

The report says the impact of the efficiency dividends by the Labor government was so notable - an estimated 14,473 job cuts already in the pipeline - the Coalition government has backed away from its promised cut of a further 12,000 jobs.

''Yet the latter announcement merely puts a floor under what may be a modest couple of years in Canberra,'' the report says.

''Job vacancies have already dropped to record lows and chances are that 2014 and 2015 will be lean years for the ACT economy.

''Job growth has stalled and the ranks of the unemployed, while still small, are growing … With something like 6000 public service jobs to go from Canberra itself in the next few years, that bulks large in a jurisdiction where total employment is only 210,000.''