THE Hunter Region has been technically in recession in recent years, according to a region-by-region comparison of economic growth across Australia.
The analysis by economist Terry Rawnsley from consultant firm SGS Economics and Planning was presented to a population conference in Sydney on Wednesday, showing that Australia’s capital cities are streaking ahead of the regional areas of each of their states. In interviews with Fairfax Media, Mr Rawnsley said his research, based on Australian Bureau of Statistics economic and labour force data, showed Sydney’s economy had grown by more than 2 per cent a year between 2012 and 2015, while the economy of the rest of NSW had shrunk at a rate of 0.3 per cent a year.
Mr Rawnsley’s figures showed that the economies of Newcastle and Lake Macquarie had contracted by 1.9 per cent in the 2013-14 financial year, and by 0.1 per cent in 2014-15. Two quarters – or six months – of negative economic growth is the technical definition of a recession. In the rest of the Hunter Valley, economic growth averaged 0.1 per cent in 2013-14 and was flat in 2014-15, meaning that the entire region, in effect, had been in recession, or close to it.
Mr Rawnsley said his work was more about how big cities could cope with their influxes of population more than advising regional cities on how to catch up, but he said areas within 90 minutes transport of a capital city could still benefit from big-city economic growth.
He said regional areas needed to find new ways of generating economic growth if they were to keep pace in any way with big cities.
“While national GDP [gross domestic product] growth looks okay, the regional variation is huge,” Mr Rawnsley said.
“In 2014-15, some 6.6 million people or 28 per cent of the national population were living in a recession.”
He said the Hunter’s relatively low economic growth reflected the longer-term decline of manufacturing as well as the recent downturn in coal prices.
The chief executive of the Hunter Research Foundation, Brent Jenkins, said the international examples of cities such as Pittsburgh and Sheffield showed that regional cities could prosper after the decline of their old manufacturing bases. Dr Jenkins said the “new economy” in the Hunter was showing some promise but it was incredibly hard to compete with the sort of intellectual and commercial fire power that resided in the Sydney technology parks that Mr Rawnsley had identified as major jobs hubs.
“We are chipping away at it, but if we are not moving as fast as our competitors we are, by definition, going backwards,” Dr Jenkins said.