State of Australia’s Fast Growing Outer Suburbs Part 1 – The economic and demographic transition of the Fast Growing Outer Suburbs

About the research

.id is a team of economic and population experts that draw meaning

from data and their knowledge of places to provide insights that

inject confidence into the decision making process for Local

Governments.

NIEIR are recognised as industry leaders in the development and

provision of robust economic modelling at the smallest credible

geographic unit (Local Government Area).

The latest economic data by LGA is available here

http://content.id.com.au/economic-indicators-australia

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State of Australia’s Fast Growing Outer Suburbs

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Economic

transition The fast growing

outer suburbs are in

transition.

City building role Increasingly important

against the backdrop of rapid

economic growth of our

cities, agglomeration, & the

rise of knowledge/services.

Strong economic

performance The fast growing outer

suburbs are performing

strongly against economic,

employment and population

indicators. Exciting

opportunities are emerging.

Investment to enable

the opportunities But investment is required to

lay the foundation to ensure

this transition is sustainable

into the future.

The 31 LGAs that make up the Fast Growing Outer Suburbs

Diversity of roles

and opportunities

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Significant contribution to the economy

Around 13% of Australia’s jobs are located in the Fast Growing Outer

Suburbs. This is higher than Western Australia’s contribution.

Economy (GRP)

$186.8b

11.3% of Australia’s GDP in

2016. Up from 10.3% in 2006

Local Jobs

1.52m

12.8% of Australia’s employment

in 2016. Up from 9.6% in 2006

Businesses

Grew by 7.4% (2014-16)

More than double national rate (Australia

had 3.4%)

Fast Growing Outer Suburbs - Economic contribution, 2016

Source: National Economics 2017

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Fast Growing Outer Suburbs support City productivity

Important role in supporting productivity by increasing labour supply

and through diverse and affordable housing options

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Population growth (2011-16)

3.0% p.a.

Population size (2016)

4.6 million

1 in 5 Australian’s called the

fast growing outer suburbs

home

Almost double the annual

average growth rate of

Australia (1.6%)

Workforce

2.21m

18.7% of Australia’s workforce.

UP from 14% in 2006

Major generator of jobs

Employment in the Fast Growing Outer Suburbs (2.6%) is growing

faster than the national average (1.2%) (2011-16)

Table: Employment change – Annual Average Growth % by part of Aust.

Source: National Economics 2017

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Annual average growth %

2006-11 2011-16 2015-16

Metropolitan Australia 2.4% 1.6% 5.6%

Metro - CBD LGA 3.4% 2.5% 8.9%

Metro - Elsewhere 1.9% 1.0% 3.2%

Metro - Fast Growing Outer Suburbs 3.3% 2.6% 9.7%

Regional Australia 1.8% 0.4% 0.9%

Australia 2.2% 1.2% 4.1%

Job growth by LGA 2011 to 2016 (top 25)

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Change LGA No. %

Sydney (C) 101,705 19.5%

Melbourne (C) 49,170 10.5%

Brisbane (C ) 55,713 6.9% Perth (C) 28,076 17.1%

Gold Coast (C) 21,336 8.9%

Wyndham (C) 20,623 36.4%

Hume (C) 20,223 21.3%

Blacktown (C) 16,015 14.9% Belmont (C) 14,436 32.5%

Bayside (C) 14,410 16.4%

Swan (C) 11,938 19.7% Sunshine Coast (R) 10,974 9.9%

Casey (C) 10,507 16.5% Parramatta (C) 10,254 6.6%

Maribyrnong (C) 9,678 24.5%

Adelaide (C) 9,438 7.0%

Moreton Bay (R) 9,224 8.2%

Wanneroo (C) 9,165 22.3%

Cockburn (C) 8,744 23.3%

Greater Dandenong (C) 8,678 8.4% Ryde (C) 8,324 9.4%

Brimbank (C) 8,297 12.1%

Whittlesea (C) 8,157 16.1% Randwick 7,896 15.5%

Nedlands 7,834 35.2%

Source: National Economics 2017

9 of the top 25 job growth hot

spots are Fast Growing Outer

Suburb LGAs

More than a butcher, baker, candlestick maker economy

Fast Growing Outer Suburb job growth in high-tech/knowledge-based

industries is growing faster than national average (1.6% p.a. vs 1.2% p.a.)

Table: Employment change by knowledge intensity, 2011-16

Source: National Economics 2017

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Average Annual % Growth

Low Tech Med Tech High

Tech

Metro - CBD LGAs 2.7% 2.3% 2.8%

Metro - Elsewhere 1.3% 1.0% 0.4%

Metro – Fast Growing Outer Suburbs 3.2% 2.4% 1.6%

Regional Centres 0.9% 0.6% 0.5%

Total Australia 1.5% 1.1% 1.2%

High tech refers to industries

that create, design or utilise

complex technologies and/or

utilise high level skills

While employment growth has been strong, the Fast Growing Outer Suburbs still face large job deficits

The job deficit position is no better than it was in 2006. This leads to daily

congestion across our cities and high costs (economic and social)

Source: National Economics 2017

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2006

70 local jobs for every 100

workers living in the Fast

Growing Outer Suburbs

69 local jobs for every 100

workers living in the Fast

Growing Outer Suburbs

2016

Early stages of economic transition. Exciting times but a long way to go

While high-tech job growth

has been strong, the Fast

Growing Outer Suburbs

share of high tech jobs is

still very low.

With the right investment,

there are significant

opportunities to increase

their share of high-tech

jobs.

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Chart: Share of total jobs by Tech Level

Source: National Economics 2017

26%

26%

48%

40%

35%

24%

40%

40%

19%

44%

40%

16%

0% 20% 40% 60%

Low

Medium

High

Metro - Fast Growing Outer Suburbs Regional Centre

Metro - elsewhere Metro CBD LGA

The skills gap limits the opportunities

Around 13% of the population in Fast Growing Outer Suburbs have a bachelor

degree, compared to 19% at the national level. This has a major influence on

labour force outcomes. Labour force outcomes - Participation

rate, Feb 2017

• With bachelor degree = 81%

• Completed Grade 10 = 50%

43.9% 47.6%

12.4% 18.8%

Year 12

completion

Bachelor degree

or higher

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Imagine the opportunities with a higher level of assets per capita

Fast Growing Outer Suburbs support over 18% of Australia’s population,

however they only share in 13% of total assets (non-dwelling)1

Chart: Assets per capita

Source: National Economics, 2017

Note: Metro CBD LGA excludes Brisbane

Unlike inner/middle areas, the

Fast Growing Outer Suburbs

can no longer rely on the

assets available in the Metro

CBD LGAs

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$1,451,768

$329,718 $231,007 $214,223 $286,532

$0

$250,000

$500,000

$750,000

$1,000,000

$1,250,000

$1,500,000

$1,750,000

Metro CBDLGA*

RegionalCentre

Metro -elsewhere

Metro - FastGrowing Outer

Suburbs

Metro average

~20% below metro average

1 Refers to Non-dwelling Capital Stock as defined in National Accounts

The pace of infrastructure growth is not keeping up with economic and demographic demand

Fast Growing Outer Suburbs

generated

• 35% of population growth

and

• 25% of job growth between

2011-16 but only received

• 13% of asset growth

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25.2%

34.8%

13.2%

0% 10% 20% 30% 40%

Share of JobsGrowth

Share of PopGrowth

Share of AssetGrowth

Metro - Fast Growing Outer Suburbs Regional Centre

Metro - elsewhere Metro CBD LGA*

Chart: Share of national growth by selected indicators, 2011-16

Source: National Economics, 2017

Note: Metro CBD LGA excludes Brisbane

Case study: Benefits of infrastructure

fundamental shift of housing

around train stations.

Construction today 30% within

800m of a train station

This increases to 80% in the

long term, directly responding

to new infrastructure

Sydney Metro is having

major spatial impacts on

Sydney’s Fast Growing

Outer Suburbs

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Why investment is required now

If business-as-usual

continues, Western Sydney

faces a jobs deficit of

306,063 and a daily worker

outflow of 492,521.

This undesirable future is a

common outcome across

most Fast Growing Outer

Suburbs without major

investment.

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-350,000

-300,000

-250,000

-200,000

-150,000

-100,000

-50,000

0

2006 2011 2016 2021 2026 2031 2036

@ 0.84 jobs per employed resident

@ historical levels of employment growth (weighted for population)

NSW Transport Job Targets

Chart: Difference between local jobs and employed

residents in Greater Western Sydney

Source: .id

Impacts on national productivity and liveability of our cities

Higher cost of living –

particularly for outer

areas

Source: BTRE

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Congestion impacts

Investment to enable the opportunities

National productivity is at stake if we do not plan for the

Fast Growing Outer Suburb transition to the new economy.

Economic transition

provides exciting

opportunities

Increasingly important

city building role

Significant economic

benefits from investment

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