NSW & Victoria- Australia’s Economic Heavyweights
The ABS has just released its Labour Force Statistics for the month. On the back of Australia’s China-fuelled resource spending the economy has been a popular theme due to the multi speed growth. However, reality is now setting in. Mining resource investment in some states provided the main support for Australian economic growth at the beginning of the century. Over the past two years the sharp decline in the mining sector has seen evident weakening in the pace of economic growth in most states across Australia, exclusive of New South Wales and Victoria.
Geographically, New South Wales and Victoria represent a relatively small area of Australia. However, as the saying goes- ‘size doesn’t matter’, the joint labour forces of the two are far from small, representing more than 57% of Australia’s labour force. The issue thereby lies not in economic strength subsiding in these areas but the lack thereof in other states. The question being raised is, can New South Wales and Victoria continue to carry the weight in terms of Australian economic growth?
Employment Statistics- June 2016
For the year ending June 2016 national employment rose by 225, 00. Employment in NSW and Victoria over the same period rose by 97%. Outside of these two states, the national labour force experienced only 3% of the total annual employment growth. Unemployment statistics followed the same trend with a 0.2% decrease in unemployment between June 2015 (6.1%) and June 2016 (5.8%). Alternatively, NSW & Victoria combined saw a 0.5% decline in unemployment, from 6.0% in June 2015 to 5.5% in June 2016.
Looking ahead, the economic strength of New South Wales and Victoria could potentially continue, although the probability of such an outcome is declining. Employment growth looks to weaken in New South Wales and Victoria over the next year. The employment growth in NSW and Victoria of 97% in inevitably going to be difficult to sustain. There are now reasons to predict a decline in the relative strength of New South Wales and Victoria with no evidence to support strengthening in the other states of Australia.
Labour Force Statistics from the Australian Bureau of Statistics: