Macquarie Park in Sydney, as well as Southbank and the Docklands in Melbourne, are three of the most productive areas in Australia when it comes to driving the economy, a report published yesterday by accountancy firm PwC shows.
The Geospatial Economic Model has recorded an “on the ground” economic review of 2214 Australian locations in terms of economic contribution. It found that in the 2012-13 financial year, one square metre of Sydney’s central businesses district generated $15,004 of economic output, which was the highest in Australia.
The report reveals economic activity is highly concentrated, with an area about the size of Tasmania generating 85% of the value of Australia’s $1.5 trillion economy last year. It found that 221 locations generated 51% of the country’s economic output.
The top 10 locations for economic output in 2013 were responsible for 18.4% of GDP, however, they employed just 12.1% of the population. These areas were the Sydney CBD generating $64.2 million, Melbourne CBD at $55.3 million and Perth CBD at $28.5 million.
Next were resources-rich areas in Western Australia – Roebourne at $28.72 million, Ashburton at $24.4 million and East Pilbara at $24.2 million.
Then Adelaide CBD came in at $16.2 million, North Sydney at $10.9 million and Macquarie Park in Sydney’s north-west at $9.1 million.
PwC economist and partner Jeremy Thorpe told SmartCompany that while the CBD areas may have many staff compared to mining areas, they were not necessarily as productive in terms of economic contribution.
“Mining is not a huge employer, but it is phenomenal for output,” he says.
Areas that were on the top 10 list in 2001-02 that dropped off this time were Churchill in the LaTrobe Valley, Victoria, and Dandenong in Victoria. Thorpe says Churchill relies largely on brown coal production, while Dandenong is a general manufacturing area that could have been hit by the manufacturing downturn.
While Australia’s economy grew by 2.6% in the 2012-13 financial year, the report found that 35% of locations actually shrank. Thorpe explains this was countered by higher growth in other areas.
PwC found that while state capitals account for a disproportionate amount of Australia’s total economic output, the CBDs are actually idling and becoming less productive. Since 2007-08, the productivity has either stagnated or declined across all of the major CBDs.
Thorpe says while the CBDs will always play a significant role, “it’s the CBD fringe areas such as Docklands in Melbourne, Pyrmont in Sydney and Fortitude Valley in Brisbane where we are seeing significant growth”.
“In Sydney, we also see interesting dynamics playing out beyond the CBD, with the economy of North Sydney having not grown over the past 13 years, while the economy of Macquarie Park has doubled over this period.”
He says Macquarie Park, which generated $9.1 million for the economy has benefited from the inclusion of train access, and many tech start-ups are embracing the space.
In Melbourne, CBD fringe area Southbank generated $7.433 million, while the Docklands generated $8.99 million.