State of the Region Coonamble

1
State of the RegionCoonamble

• Western Research Institute
• 24th September 2005

2
Outline

• International / National Scene
• Regional Issues
• Coonamble at a glance
• Industry Growth
• Business Performance
• Overall Assessment

3
International Scene

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

4
Oil Prices

• Forty years of known reserves
• Nine years for Australia
• One elephant in Caspian Sea in fifty years
• Petrol/Diesel prices higher
• Ethanol/Biodiesel?

5
Australian Petroleum Industry Trade Deficit
6
National Scene

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

7
Infrastructure

• 1970s to early 80s Government capital
  expenditure 7.2 of GDP
• 2003-04 3.6 of GDP
• Roads 22 in 1960s now 10
• 1 increase in infrastructure spending increases
  output by 0.17 and 0.39

8
Infrastructure Superannuation Funds

• 1988 95bn or 21 of GDP
• 2004 628bn or 80 of GDP
• 9bn infrastructure projects on stock exchange
• Public Private Partnership

9
Alexander Graham Bell
Communications Transport
1847-1922
The first words spoken into a telephone
were Watson, come here, I want you. Result
Created and saved a trip.
10
The Regions
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Regional Issues

• Wealth effect falling home prices not strong
• High petrol prices
• Consumption softer
• Gold rush effect
• Ageing population and net out-migration
• Drought

12
Farm Sector Trends

• Farm produce 19 of exports down from 38 in the
  70s
• Number of farming enterprises declined by 10 in
  the last 10 years
• 60 multiple enterprise (mixed farming)

13
Farm Sector Trends

• Increase in horticultural farms, decline in
  intensive livestock farming
• Farm sector not competitive for labour resources
• Increasing diversity

14
Farm Sector Performance1981-2001
Note presented in 2000-01 dollars. Source
Gleeson and Piper 2002
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Coonamble Key Statistics

• Population 4,758 2003 ERP
• Area 9926.2 km2
• Average age 36
• ATO Avg. individual income 2002-03 30,580
• Largest Industries Agriculture (1/3 employment),
  Retail, Health, Education and Government.

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Comparison Data
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Industry Shift Share Analysis

• Outperforming sectors
• Retail (48)
• Government Administration and Defence (18)
• Personal and Other Services (15)

• Underperforming sectors
• Health and Community Services (-15)
• Property and Business Services (-4)
• Manufacturing (-16)

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Occupation Shift Share Analysis

• Outperforming sectors
• Advanced Clerical and Service Workers (8)
• Intermediate Production and Transport (11)
• Elementary Clerical, Sales and Service Workers
  (22)

• Underperforming sectors
• Managers and Administrators (-45)
• Professionals (-9)
• Labourers and Related Workers (3)

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Skill Shortages by Industry

• 47 businesses in Orana region face skills
  shortage (33 regional NSW).
• Retail and Manufacturing most prominent problem.
• May be reason behind constricted growth in these
  sectors.
• Recruitment of skilled sales staff an issue in
  Coonamble.

Source Orana Region Business Survey
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Skill Shortages by Industry
Source Orana Region Business Survey
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Orana Key Sectors

• Backwards and forward linkages width and depth
• Retail, Hospitality, Recreation, Transport and
  Personal Services
• Underperforming in all except Personal Services

22
Orana Business Performance
Source Orana Region Business Survey
23
Orana Business Performance
Source Orana Region Business Survey
24
Performance by Sector Orana
Source Orana Region Business Survey
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Coonamble Business Performance
Source WRI Business Survey
26
Conclusion

• Orana/Coonamble important part of Australian
  economy.
• Ageing population and net migration causing
  population decline.
• Overall employment growth, but driven by state
  and industry trends, not local efficiencies.

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Conclusion

• Greater skills shortage in Orana than rest of
  regional NSW.
• Business performance positive growth since 2003,
  still below Orana.
• Superannuation and infrastructure an important
  issue.