ECONOMIC PERFORMANCE OF AUSTRALIA’S CITIES ?· This report has been prepared by SGS Economics...

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Transcript of ECONOMIC PERFORMANCE OF AUSTRALIA’S CITIES ?· This report has been prepared by SGS Economics...

  • 1Economic Performance of Australias Cities and Regions

    ECONOMIC PERFORMANCE OF AUSTRALIAS CITIES AND REGIONS2016-17 DECEMBER 2017

  • This report has been prepared by SGS Economics and Planning. SGS Economics and Planning are not liable to any person or entity for any damage or loss that has occurred, or may occur, in relation to that person or entity taking or not taking action in respect of any representation, statement, opinion or advice referred to herein.

    SGS Economics and Planning Pty LtdACN 007 437 729www.sgsep.com.auOffices in Canberra, Hobart, Melbourne, Sydney

    http://www.sgsep.com.au

  • TABLE OF CONTENTSPREFACE 1

    About SGS Economics and Planning 1

    About this publication 1

    1 OVERVIEW 2

    1.1 GDP Growth Rates 2

    1.2 Contribution to Growth 5

    1.3 Interest Rate Comparison 6

    2 ECONOMIC PERFORMANCE 7

    2.1 Sydney 8

    2.2 Melbourne 12

    2.3 Brisbane 17

    2.4 Adelaide 21

    2.5 Perth 25

    2.6 Canberra 29

    2.7 Tasmania 32

    2.8 Regional Analysis 35

    3 METHODOLOGY 39

    3.1 Industry methods 39

    3.2 Areas for further refinement and research 42

  • LIST OF FIGURESFIGURE 1 2016-17 GDP GROWTH RATES VOLUME MEASURE 2FIGURE 2 2016-17 GDP PER CAPITA GROWTH RATES VOLUME MEASURE 4FIGURE 3 2016-17 GDP PER CAPITA VOLUME MEASURE 4FIGURE 4 SYDNEY GDP GROWTH VOLUME MEASURE 9FIGURE 5 CONTRIBUTION TO SYDNEY GDP GROWTH 2016-17 9FIGURE 6 SYDNEY GDP PER CAPITA GROWTH VOLUME MEASURE 10FIGURE 7 SYDNEY INDUSTRY STRUCTURE 10FIGURE 8 LABOUR PRODUCTIVITY, SYDNEY 11FIGURE 9 MELBOURNE GDP GROWTH VOLUME MEASURE 13FIGURE 10 CONTRIBUTION TO MELBOURNE GDP GROWTH, 2016-17 13FIGURE 11 MELBOURNE MANUFACTURING GVA ($MILLION) 14FIGURE 12 MELBOURNE GDP PER CAPITA GROWTH VOLUME MEASURE 15FIGURE 13 MELBOURNE INDUSTRY STRUCTURE 15FIGURE 14 LABOUR PRODUCTIVITY, MELBOURNE 16FIGURE 15 BRISBANE GDP GROWTH VOLUME MEASURE 18FIGURE 16 BRISBANE GDP PER CAPITA GROWTH VOLUME MEASURE 18FIGURE 17 CONTRIBUTION TO BRISBANE GDP GROWTH, 2016-17 19FIGURE 18 BRISBANE INDUSTRY STRUCTURE 19FIGURE 19 LABOUR PRODUCTIVITY, BRISBANE 20FIGURE 20 ADELAIDE GDP GROWTH VOLUME MEASURE 22FIGURE 21 ADELAIDE GDP PER CAPITA GROWTH VOLUME MEASURE 22FIGURE 22 CONTRIBUTION TO ADELAIDE GDP GROWTH, 2016-17 23

    FIGURE 23 ADELAIDE INDUSTRY STRUCTURE 23FIGURE 24 LABOUR PRODUCTIVITY, ADELAIDE 24FIGURE 25 PERTH GDP GROWTH VOLUME MEASURE 26FIGURE 26 CONTRIBUTION TO PERTH GDP GROWTH, 2016-17 26FIGURE 27 PERTH GDP PER CAPITA GROWTH VOLUME MEASURE 27FIGURE 28 PERTH INDUSTRY STRUCTURE 28FIGURE 29 LABOUR PRODUCTIVITY, PERTH 28FIGURE 30 CANBERRA GDP GROWTH VOLUME MEASURE 30FIGURE 31 CONTRIBUTION TO CANBERRA GDP GROWTH, 2016-17 30FIGURE 32 CANBERRA INDUSTRY STRUCTURE 31FIGURE 33 CANBERRA GDP PER CAPITA GROWTH VOLUME MEASURE 31FIGURE 34 TASMANIA GDP GROWTH VOLUME MEASURE 33FIGURE 35 TASMANIA GDP PER CAPITA GROWTH VOLUME MEASURE 33FIGURE 36 CONTRIBUTION TO TASMANIAN GDP GROWTH, 2016-17 34FIGURE 37 TASMANIAN INDUSTRY STRUCTURE 34FIGURE 38 REGIONAL NSW GDP AND GDP PER CAPITA GROWTH 36FIGURE 39 REGIONAL VICTORIA GDP AND GDP PER CAPITA GROWTH 36FIGURE 40 CONTRIBUTION TO REGIONAL VICTORIA GDP GROWTH, 2016-17 37FIGURE 41 MANUFACTURING GVA VOLUME MEASURE ($ MILLIONS) 37FIGURE 42 CONTRIBUTION TO REGIONAL WA GDP GROWTH, 2016-17 38FIGURE 43 REGIONAL WA CONSTRUCTION GVA VOLUME MEASURE ($ MILLIONS) 38FIGURE 44 CONTRIBUTION TO REGIONAL QLD GDP GROWTH, 2016-17 38

    LIST OF TABLESTABLE 1 GROSS DOMESTIC PRODUCT VOLUME MEASURE 2016-17 3TABLE 2 CONTRIBUTION TO GDP GROWTH VOLUME MEASURE 5TABLE 3 HYPOTHETICAL REGIONAL INTEREST RATES 6TABLE 4 CONTRIBUTION TO SYDNEY GDP GROWTH VOLUME MEASURE 11

    TABLE 5 CONTRIBUTION TO MELBOURNE GDP GROWTH VOLUME MEASURE 14TABLE 6 CONTRIBUTION TO BRISBANE GDP GROWTH VOLUME MEASURE 20TABLE 7 CONTRIBUTION TO ADELAIDE GDP GROWTH VOLUME MEASURE 24TABLE 8 CONTRIBUTION TO PERTH GDP GROWTH VOLUME MEASURE 27

  • 1Economic Performance of Australias Cities and Regions

    PREFACE

    ABOUT SGS ECONOMICS AND PLANNING

    SGS Economics and Planning (SGS) is a member-governed college of professionals that exists to shape policy and investment decisions in favour of sustainable urban and regional development. We are Australias premier independent advisory firm in this field. As a college of professionals, SGS aspires to continuously learn and create new knowledge, to constructively contribute to policy debate and to offer real solutions to urban and regional issues. SGS is independent, honest, thoughtful and innovative, committed to the public interest and committed to sustainability.

    SGS became a certified B Corporation in 2017. B Corps use the power of business to solve social and environmental problems. SGS was certified by the non-profit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Weve evaluated how our practices impact our employees, our community, the environment, and our customers.

    SGS is at the forefront of Economic and Social Analysis. We are at the cutting edge of research into economic clusters and the links between urban amenity, economic growth and community wellbeing. Our approach is underpinned by the recognition that economic development is a continuous process of growing an area's level of income and capital and how these are distributed amongst the community. Typically measured in terms of income and employment, economic development is also measured by improvements in education, health, culture, community wellbeing and the environment.

    ABOUT THIS PUBLICATION

    Australian cities and regions are orphans. Responsibility for managing their economy (in terms of taxation, planning, infrastructure provision, regulation and economic

    development) fall between all tiers of government. Official statistics tend not to publish economic data in more detail than the state level. For the past nine years SGS has produced estimates of Gross Domestic Product (GDP) for each major capital city and regional area across Australia. Our research into understanding the distribution of economic growth has filled a key void in economic policy.

    Since the 2015-16 publication of Economic Performance of Australias Cities and Regions, the Australian Bureau of Statistics (ABS) has issued a new set of National and State Accounts. This ABS data contains a set of historical revisions, where the annual data is revised through the time series back to 1989-90 for the purposes of incorporating updated data and a range of improvements to compilation methods. The 2016-17 publication was to have used the Place of Work data from the 2016 Census, however this data was published by the ABS, but then removed due to errors.

    The remainder of this document is set out as follows: Section one provides a summary of results, comparing the economic outcomes

    for each region Section two provides a detailed discussion of the economic performance of each

    region Section three provides a detailed description of the methodology.

    For further information about the statistics contained within this publication please contact Mr Terry Rawnsley via email Terry.Rawnsley@sgsep.com.au or +61 3 8616 0331.

    GDP (Gross Domestic Product) refers to Australia, GSP (Gross State Product) refers to a State, while GCP (Gross City Product) refers to a city. However, for simplicitys sake in this paper all different measures are referred to as GDP.

    mailto:Terry.Rawnsley%40sgsep.com.au?subject=

  • 2Economic Performance of Australias Cities and Regions

    OVERVIEW 01The Australian Bureau of Statistics (ABS) Australian National Accounts: State Accounts (Cat. No. 5220.0) publication provides estimates of economic activity for each state and territory on an annual basis. SGS Economics and Planning (SGS) has developed estimates of economic activity for each major capital city, along with the regional balance of each state. These statistics provide improved insights into the relative economic performance of each of Australias major capital cities (Sydney, Melbourne, Brisbane, Adelaide and Perth), and the regional balance of each state, the Northern Territory, Tasmania and the Australian Capital Territory. They also highlight the productivity challenge facing our cities and regions.

    During the early 1980s, the economic structure of Australia was fairly homogeneous. Manufacturing was the primary income generator across most parts of the country. Of course, certain areas had specialisation industries for example, Agriculture, Mining and Manufacturing in regional areas and knowledge-intensive services in the central core of cities. Examining economic statistics at the national level would have provided reasonable insight into the conditions across the whole of Australia.

    The economic evolution of the past 30 years has resulted in a far more complex picture. The rise of knowledge-intensive services, differentials in government policy and investment, the resources boom, the declining competitiveness of manufacturing and other changes have created a patchwork economy.

    1.1 GDP GROWTH RATES

    As shown in Figure 1 there was a wide range of growth rates across the country. The regions with the strongest growth were Regional South Australia (6.6 per cent) and Regional Victoria (5.8 per cent) which were boosted by strong agricultural production, Canberra (4.6 per cent), Northern Territory (3.9 per cent), Sydney (3.3

    FIGURE 1 2016-17 GDP GROWTH RATES - VOLUME MEASURE

    Source: Australian National Accounts: State Accounts, Cat. No. 5220.0 and SGS Economics & Planning

    -6.0%

    -4.0%

    -2.0%

    0.0%

    2.0%AUSTRALIAN AVERAGE

    4.0%

    6.0%

    8.0%

    Sydn

    ey

    Melbo

    urne

    Regio

    nal V

    ic

    Brisb

    ane

    Regio

    nal Q