Western Research Institute

1
Western Research Institute

• 4th Annual
• Regional Review Dinner

2
Outline

• International Scene
• National Scene
• The Regions
• Central West
• Skilled Workers
• Overall Assessment

3
International Scene

• World Economic Growth 4.6 2004
• 3.7 2005
• 3.5 to 2010
• Demand for Commodities China
• Risks - ?USD
• - Slowdown China
• - higher Oil prices

4
National Scene

• Australian economic growth 3.0 - 3.3
• AUD high-commodities prices/expected to ease to
  65-70 cents
• Large CAD
• Skill shortages
• Australia US Free Trade Agreement-
  complementarity

5
The Regions
6
Regional Issues

• Wealth effect falling home prices not strong
• High petrol prices
• Consumption softer
• Gold rush effect

7
The Central West
8
High Growth Industry Sectors

• Agriculture the strongest growth sector across
  the Central West
• Despite negative growth across the industry,
  Central West 422 jobs 1996-2001
• Contributes 410m in GRP annually
• GRP 41,456 per worker
• State growth 705 jobs
• Industry Growth factors -760 jobs

9
High Growth Industry Sectors

• Mining also experienced significant growth in
  employment across the Central West
• Strong negative growth across the industry
  countered in Central West 408 jobs 1996-2001
• Contributes 448m in GRP annually
• GRP 242,162 per worker
• State growth factors 155 jobs
• Industry Growth factors -813 jobs

10
High Growth Industry Sectors
11
Key Industry Sectors

• Backward/forward linkages and dispersion.
• Input-output analysis indicates the transport
  industry has the most powerful and widespread
  impact on the Central West.
• Declining employment in transport indicates
  issues in the industry.

12
Key Industry Sectors

• Number of other industries verging on being key
  sectors.
• Metal manufacturing, utilities and wholesale
  trade need to make more local purchases across a
  range of sectors to increase local impact.
• Hospitality has a large upstream impact but is
  low on downstream linkages.

13
Sales Performance

• Sales performance in the Central West continues
  to exceed that of regional NSW as a whole.
• The past year has seen a dramatic improvement in
  sales performance across the region.
• Sponsored by Central West Regional Development
  Board and Country Energy

14
Sales Performance
15
Sales Performance
16
Sales Performance

• The construction and retail industries
  experienced the largest improvement in sales
  performance between September and December 2004.
• All sectors expect sales to remain fairly stable
  during the March quarter, with the exception of
  transport and construction who expect a decrease.

17
Sales Performance
18
Retail Sales Performance
Sponsored by Reliance Credit Union
19
Retail Sales Performance
20
Skilled Workers

• 18 Central West businesses employ apprentices or
  trainees.
• 41 Central West businesses reported difficulties
  in recruiting and retaining skilled staff.
• The transport industry reported the most
  difficulty recruiting and retaining skilled
  staff, namely truck and forklift drivers.
• The construction industry also considered skilled
  construction tradesmen/labourers to be difficult
  to recruit and retain.

21
The National

• One in 2 firms difficulty with skilled
• Apprentices higher in small than large
• Average expenditure 650 per employee on training
• 28 of productivity improvement from skills
  enhancement

22
Overall Assessment

• Positives
• Strong performer
• New opportunities China AUS/US FTA
• Out performers Agriculture, mining other
• 3 University campuses, TAFE, private providers,
  Central West Group Apprentices
• Close proximity to Sydney
• Financial services such as Reliance

23
Overall Assessment

• Negatives
• Key sectors low growth
• Leakages of skills
• Leadership to take advantage of opportunities
• Transport, education, infrastructure

24
Needs to be Done

• Bens ideas
• Understanding region so appropriate Investment
• Identifying addressing bottlenecks
• More key sectors