State of the Regions report details lopsided growth

The country is experiencing sporadic and lopsided growth, with some regions enjoying significantly higher than national average growth, while some suffer in the economic doldrums, a new report has found.

The State of the Regions 2019-20 report shows a ‘a better than expected economic performance’ may be under way in areas of Western Australia and Tasmania, while the impact of the ongoing drought is hamstringing growth in Queensland and New South wales.

The report, prepared for the Australian Local Government Association, details a better than expected performance in pastoral regions in areas in the Northern Territory, South Australia and some areas of Queensland.

On the downside, the Gross Regional Product growth rate has subsided in Melbourne and the high preliminary rates estimated last year for some of the non-metropolitan Victorian regions also look like disappearing,” the report said.

“Much of NSW is again drought-affected. Despite indications that non-metropolitan Queensland is maintaining momentum, growth performance in the Brisbane metropolitan area seems lacklustre.”

Productivity, gross regional product per hour worked, in the regions also varied widely in 2019. WA Pilbara Kimberley ($306/hour) was well above the national average ($82/hour), while productivity fell to $59/hour in both SA East and Vic Loddon Mallee.

“There were 12 regions with productivity more than 10 percent above the national average, and some 34 regions with productivity more than 10 percent below the national average,” economist Dr Peter Brain, the report’s lead author, said.

“Industry mix would have had a lot to do with this distribution, with GRP per hour worked high in finance and mining and low in tourism-related industries, retail trade and various other services. Productivity can also be low in rural areas suffering drought and more generally in regions suffering from structural adjustment.

“Apart from WA Pilbara Kimberley, declining productivity was reported from most of nonmetropolitan Victoria and South Australia. Previous State of the Regions reports have observed that mining booms do nothing for rural prosperity, if only because they raise the exchange rate and therefore reduce Australian-dollar farm incomes.”

“The latest report is an important indicator of the relative economic health of Australia’s regions,” ALGA President, Mayor David O’Loughlin, said.

“While it shows that productivity has improved in some areas, it also demonstrates that coordinated and cooperative action is needed by all three levels of government to ensure our communities can thrive, especially those areas where growth has been sluggish.”

The full report can be purchased here

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