The Hunter Research Foundation (HRF) Centre’s latest Upper Hunter Region Economic Indicators tell a positive story of economic recovery in the December 2016 quarter, including a new wave of business and consumer confidence, and a marked fall in the unemployment rate.
Upper Hunter* residents’ expectations for the regional economy in the next three months were positive on balance, recording their best reading since 2005. Their longer-term expectations of the regional economy were the strongest since late 2010, during the mining investment boom. Business owners were also markedly more positive about the economy than in the last three years. Their hiring and capital expenditure intentions signal prospects for continuing economic improvement to come.
The renewed optimism we are seeing in the Upper Hunter is supported by the recovering labour market, an upswing in commodity prices and strong performance by agriculture.
Nationally, the agricultural industry was the biggest contributor to annual growth in gross domestic product (GDP) in 2016, with farm production forecast to reach a record $63.8 billion in 2016-17.
The depreciation of the Australian dollar, good weather and rising world prices have been key factors in the agricultural sector’s strong performance, underpinned by growth in global demand for food and improved farm productivity.
At our Upper Hunter economic breakfast in Muswellbrook on May 2, our audience heard about the region’s agricultural strengths and opportunities for future growth in this important sector.
The lead consultant on the NSW Government’s 2016 Upper Hunter Industry Scenarios report, Michael Connell, said that agribusiness played a strategic role in the Upper Hunter economy, with more than 1900 businesses employing 2300 people and generating $500 million in 2015, without the wine and thoroughbred industries. In addition, food processing employed more than 650 in the region.
The Hunter is an international centre for wine production and thoroughbred breeding. The Upper Hunter has major agricultural strengths in dairy, livestock and wine, and emerging strengths in oilseeds, legumes and nuts, and food processing.
There are also opportunities to develop agri-tourism through a food and wine experience and the equine sector.
Speaking as part of a panel discussion at the breakfast, Brett Keeping, general manager of Two Rivers Wines and Vice-President of the Upper Hunter Winemakers Association, said there were positive signs that the wine industry was recovering from a prolonged downturn.
“We need exports for the wine industry to thrive and there are more positive signs in the past year than in the previous decade that the broader industry is recovering,” he said.
Muswellbrook Mayor Cr Martin Rush said that agribusiness is important to creating greater diversity in the Upper Hunter economy.
“We have enormous competitive advantages here. It’s time we moved beyond talking to take action on the issues that need to be addressed to provide businesses with certainty and encourage investment,” he said.
Dr Anthea Bill, is Lead Economist, HRF Centre
*Singleton, Muswellbrook and Upper Hunter Shire Local Government Areas