Wednesday, 13 December, 2017

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Greater Newcastle (GN) is growing, but does it have what it takes to become a global city?

Census data shows a decline in the Hunter region’s rate of growth from 2011 to 2016. Employment growth reduced to 3.2 per cent in the period 2011-16, significantly lower than the 11.4 per cent growth in 2006-11.

Of the 8,500 jobs added between 2006 and 2011, according to the Census, growth was strongest in health care and social assistance, adding 6,500 jobs. Also growing strongly were construction, education and training, and accommodation and food services. Nationally and within the region, job gains in health and education have been driven by demographic factors, specifically, growing demand. Job growth in construction has been supported by the housing and construction boom across many parts of the city as well as a climb in public infrastructure spending across NSW.

However, manufacturing lost 8,900 jobs over the five-year period. Less substantial but still sizeable job losses also occurred in wholesale and retail trade.

The Census shows employment growth had declined in both Newcastle and Lake Macquarie and in the remainder of the Hunter. The decline in employment growth was steeper in the Hunter balance (outside of Lake Macquarie and Newcastle) largely because the mining sector added far fewer new jobs than it had in the first part of the decade.

This Census data was collected in August 2016. However, Labour Force Survey data suggests that the labour market has strengthened from August 2016. The Hunter’s unemployment rate fell from 7.7 to 5.5 per cent.

Comparing Greater Metropolitan Sydney’s employment growth rates with the Hunter’s, between 2011 and 2016, reveals a deepening divide between metropolitan and regional Australia. Sydney’s employment grew by 10 per cent, three times faster than the Hunter’s, according to the Census.

Greater Metropolitan Sydney also experienced job losses in manufacturing, but had employment gains across a greater number of industry sectors. The construction industry added the greatest number of jobs, followed by health and education.

A notable difference was the growth in Sydney’s professional, technical and scientific sector. Employment in these knowledge-intensive domains was not a growth driver in the Hunter for the last five years. Growing this industry sector outside capital cities is a challenge. Typical hurdles include a region’s lower population and urban density, poorer infrastructure and amenity, fewer internationally syndicated firms, and less specialised labour markets.

Population growth has fed the Sydney growth cycle, and its impressive employment gains. However, Sydney faces increased pressures, including congestion and housing affordability.Would Sydney’s growth have been achievable for the Hunter - or desirable, given spin-off effects on lifestyle and amenity?

As part of the preparation for the recently released draft of the Greater Newcastle* Metropolitan Plan, the NSW Government consulted Professor Greg Clarke. A UK-based global cities expert, Professor Clarke provided insights from cities that are not trying to mirror established metropolises that operate as large corporate hubs. Clark referred to ‘new world cities’, which aim to pursue balanced growth that protects amenity and lifestyle. They have good connectivity, are talent-led, and specialise in industries that are globalising.

The Hunter region is at a critical juncture, a time to debate about growth and our future.

The HRF Centre aims to inform and report on these debates, and other critical economic issues. Our 2018 economic breakfasts will be under the over-arching theme, ‘Growing Smarter’. We hope that you will join us.

Dr Anthea Bill, HRF Centre

*Greater Newcastle (GN) comprises the Local Government Areas of Newcastle, Lake Macquarie, Port Stephens, Cessnock, and Maitland.

This opinion  piece appeared in the Newcastle Herald on 11 December.

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