️ Highlights:
1. Melbourne’s economy experienced significant growth before the COVID-19 pandemic, outpacing the national average. However, this growth was not uniform across the city, with slower growth in middle-ring areas transitioning away from manufacturing.
2. Despite strong economic growth, Melbourne’s per capita economic growth lagged behind the national average, indicating that the standard of living per person did not increase at the same rate.
3. Knowledge jobs began spreading beyond the Melbourne CBD, with the City of Yarra experiencing significant growth in the knowledge and professional service industry. Cremorne emerged as a vibrant knowledge hub within the City of Yarra.
4. The importance of precincts in driving knowledge-based job growth became evident, with Cremorne having 46% of its workforce employed in the knowledge and professional service sector.
5. The COVID-19 pandemic caused a major setback for Melbourne’s economy, with economic growth falling to 1.2% per annum since 2019, below the pre-COVID rate. The recovery has been uneven across industries and regions, with tourism-dependent industries and construction facing setbacks.
6. To thrive in the future, Melbourne needs to focus on productivity and participation. Strategies such as National Employment Clusters, infrastructure investments in growth areas, skill development, and improved housing affordability are needed.
Local councils can play a role in leveraging infrastructure investment, securing competitive grant funding, and understanding what drives local growth.
Executive Summary
In a recent webinar, over 130 local and state government professionals convened to discuss the economic trajectory of Greater Melbourne, leveraging insights from the 2023 State of the Regions Dataset. The discussion, led by Rob Hall, outlined the pre-COVID economic rise, the ongoing recovery, and the economic outlook of Melbourne, emphasizing the pivotal role local councils can play in enhancing Melbourne’s productivity. Here we delineate the six key insights and the implications for local economic development presented in the webinar.
Key Insights
- Economic Growth Driver: From 2012 to 2019, Melbourne spearheaded Australia’s economic growth, expanding by 24%, surpassing the national average. However, this growth was not evenly distributed across the city, with inner regions experiencing more substantial growth compared to middle-ring areas transitioning away from manufacturing.
- Population Growth and Economic Disparity: Despite the robust economic growth, Melbourne’s per capita economic growth lagged behind the national average, indicating a disparity in the standard of living.
- Decentralization of Knowledge Jobs: A significant trend was the decentralization of knowledge jobs, moving beyond the Melbourne CBD, with the City of Yarra witnessing a 26% growth in the knowledge and professional service industry value added between 2012 and 2019.
- Precincts Driving Job Growth: Precincts like Cremorne in the City of Yarra have become vibrant knowledge hubs, fostering substantial growth in the knowledge and professional service sector.
- Uneven COVID-19 Recovery: The pandemic disrupted Melbourne’s economic growth trajectory, with some regions and industries recovering at a slower pace, highlighting the need for targeted recovery strategies.
- Addressing Productivity and Participation: The future prosperity of Melbourne hinges on enhancing productivity and participation, necessitating strategic initiatives such as infrastructure investments and skill development.
Implications for Local Economic Development
Local councils have a crucial role to play in reviving Melbourne’s economic dynamism through various strategies including:
- Leveraging Infrastructure Investment: Utilizing Melbourne’s strong infrastructure investment pipeline to foster local economic development.
- Place-Based Federal Funding Programs: Proactively identifying projects to secure competitive grant funding, aligning with initiatives such as the Thriving Suburbs and Urban Precincts programs.
- Understanding Local Growth Drivers: Developing a deep understanding of economic, demographic, and liveability changes to facilitate informed decision-making.
Conclusion
As Melbourne navigates its economic recovery, it is imperative to focus on strategies that foster sustainable growth. Local councils are positioned to be catalysts in this transformation, leveraging infrastructure investments and understanding local growth dynamics to steer Melbourne towards a future of increased productivity and economic resilience.