.id's senior economist, Rob Hall, looks at the four forces shaping the future economy of hte Southern Downs region, the key drivers of the local economy currently, and the influences of the changing demographic profile on the region.

1. Forces shaping the
Southern Downs economy
Robert Hall
16 October 2018

2. 2

3. Today’s presentation
3
1. Forces shaping the future
economy
2. Southern Down’s economy
now
3. What is likely to drive future
growth?
4. Three ideas to get there https://economy.id.com.au/southern-downs
Information tools to inform your economic
development strategy

4. Four forces
shaping the
future economy
4

5. 1. Increased application of digital technology and automation
5

6. 2. Knowledge and services are driving economic growth. High
demand for occupations that require cognitive skills
6
Employment by skill type
Australia, Cumulative change since 2007
Sources: ABS, RBA
Employment by Industry
Australia, Share of Total

7. 3. Employment growth has shifted to regions with a large
knowledge and service sector economy
7 Sources: National Economics (NIEIR)
Employment growth by selected region
Average annual growth %
18%
6%
25%
3%
12%
8%
14%
4%
34%
3%
36%
5%
6%
4%
7%
0%
GREATER
SYDNEY
REST OF NSW GREATER
MELBOURNE
REST OF VIC. GREATER
BRISBANE
REST OF QLD GREATER
PERTH
REST OF WA
2007-2012 2012-2017

8. Cities boost growth & investment in nearby regions
8 Sources: National Economics (NIEIR)
In-migration of former metro residents vs distance from Sydney
AlburyArmidale
Bathurst Dubbo
Orange
Tamworth
Wagga Wagga
Wollongong
Newcastle
Lake Macquarie
Mid-CoastWingecarribee
Shoalhaven
0
2,000
4,000
6,000
8,000
10,000
12,000
0 100 200 300 400 500 600
Levelofin-migrationfromGreaterSydney
Distance from Sydney's CBD (km)

9. Tailored strategies
required as each
region is unique.
10

10. Agriculture, forestry and
fishing
Mining
Manufacturing
Utilities
Construction
Wholesale
Retail
Hospitality
Transport
IMT
Financial Property
ProfessionalAdmin
Govt
Ed
Health
Arts and rec
Other Services
0
2
4
6
8
10
12
14
16
0 5 10 15 20 25
ShareofTotalEmployment%
Share of Total Value Added %
Southern Downs’ primary role is an Industry (agriculture) and
Service Hub
11 Sources: National Economics (NIEIR)
Southern Downs Dominant Industries
Employment and Value Added - % of total, 2017
(Food product)
Size of circle reflects
combined share of
employment and value
added
Tourism

11. Food production and processing is a dominant sector which
brings money into the region.
12 Sources: National Economics (NIEIR)
Agriculture, Food Product and Beverage Product Manufacturing
Southern Downs 2017
(Food product)
Size of circle reflects
combined share of
employment and value
added
Tourism
EXPORTS
Sales outside of Southern Downs
$693m
56% of total
JOBS
2839
19% of total
Every 10 jobs generated in food
product manufacturing, creates
another 6 jobs within the
Southern Downs economy
(e.g. mfg, agriculture, transport, business
services)
EMPLOYMENT MULTIPLIER

12. The demographic profile influences the industry mix with an
over-emphasis on very young or older population
13 Source: ABS Census of Population and Housing (2016)
Age structure – five year age groups
% of total population, 2016
(Food product)
Size of circle reflects
combined share of
employment and value
added
Tourism
0
1
2
3
4
5
6
7
8
0 to 4 5 to 9 10 to
14
15 to
19
20 to
24
25 to
29
30 to
34
35 to
39
40 to
44
45 to
49
50 to
54
55 to
59
60 to
64
65 to
69
70 to
74
75 to
79
80 to
84
85 and
over
Southern Downs Regional Qld
Babies and kids Pre-retirees and retirees

13. Ageing is good news for health, wellness, lifestyle and
retirement / aged care, but risks of skill shortages
14 Source: National Economics and ABS Census of Population and Housing (2016)
Change in age structure, 2011-2016
Southern Downs
Size of circle reflects
combined share of
employment and value
added
-188
56
-253
-72
138 140
-8
-247
-66 -62 -69
169
64
579
517
329
114 92
Employment grew
by 325 jobs
(+25%) over the
past decade
HEALTH CARE & SOCIAL
ASSISTANCE
Local Jobs
1,624 jobs
Value Added
$155m
Health Industry Snapshot
Southern Downs, 2017

14. Education levels are improving, but more work required to
overcome the skills divide.
15 Source: ABS Census of Population and Housing (2016)
-385
-129
13 60
1,528
YEAR 8 OR
BELOW
YEAR 9 OR
EQUIVALENT
YEAR 10 OR
EQUIVALENT
YEAR 11 OR
EQUIVALENT
YEAR 12 OR
EQUIVALENT
Change in highest level of schooling completed
2011-2016, Southern Downs
61%
57%
67%
64%
72%
70%
20-29 YEARS 30-39 YEARS
Southern Downs Regional QLD QLD
Highest level of schooling completed
2016, % of total by age

15. Dominant industries are driving growth. Transport is an
emerging industry.
16 Source: National Economics
Recent employment change
Southern Downs, 2012-2017
Long term economic transition to services
Selected industries,
% of total employment, Southern Downs
20%
14%
8%
11%
7%
9%
2001 2017
Agriculture
Health Care and Social
Assistance
Accommodation and
Food Services
195
152
141
109
101
59
43
42
8
-29
-34
-41
-50
-53
-117
-120
-232
-251
-877
TRANSPORT
OTHER SERVICES
EDUCATION
HEALTH
ACCOMMODATION AND FOOD
PUBLIC ADMINISTRATION / SAFETY
ADMIN
ARTS AND REC
MANUFACTURING
FINANCIAL
MINING
INFO MEDA AND TELEC
PROFESSIONAL
PROPERTY
CONSTRUCTION
UTILITIES
WHOLESALE
RETAIL
AGRICULTURE
Dominant industry

16. Short term horizon looks positive with a large number of
projects in the pipeline. But who will do the jobs?
17
3940
34
373634
6362
26
59
55
51
56
33
22
44
75
59
17
39
11
6
36
13
20
11
19
38
1010
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Non-residential
Residential
Value of building approvals
$ million, Southern Downs

17. Southern Downs also plays an important tourism role. Local
produce & natural environment are important attractors.
18 Source: National Economics
Value of tourism and hospitality 2016/17
% of total – direct and indirect
TOURISM & HOSPITALITY
Local Jobs
1,268 jobs
Exports
$227m
8.5
8
7.6
7.3
Employment Value added
Southern Downs QLD
Top activities in Southern Downs Region
• Eat out / dine at a restaurant and/or cafe
• Visit friends & relatives
• Sightseeing/looking around
• Bushwalking / rainforest walks
• Pubs, clubs, discos etc
• Visit national parks / state parks
• Go shopping for pleasure
• Visit wineries
(Source: TRA)

18. Domestic overnight visitor now at the highest level since 2010.
Toowoomba Airport opening (early signs are good)
19 Source: National Economics
Overnight visitors up
Total domestic overnight visitors
1.9
1.5
1.3
1.4
1.5
1.3
1.5 1.5
0.00
0.50
1.00
1.50
2.00
2.50
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2010 2011 2012 2013 2014 2015 2016 2017
Domestic overnight visitors % of QLD
Driven by growth in business tourism
Reason for visit by domestic overnight visitors ‘000
Southern Downs
129
115
123
170
153
134
168
180
146
163
157
88
112
64
121
105 106
90
122
80
124 119
25 27
16
55
32
21 24 23
68
39
65
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Holiday
Friends and
relatives
Business
Toowoomba
Airport opens

19. Building on strengths that
intersect with the macro forces
is part of the solution
20

20. What will drive growth in Southern Downs?
21
Competitive sectors that intersect
these forces:
• Food production and food
/beverage manufacturing
• Tourism
Other opportunities leveraging off
existing role:
• Agribusiness
• Health/wellness/retirement
• Employment land (relative
affordability) e.g. Distribution
services, adv mfg
Success of Toowoomba
• Stronger regional growth and
economic multipliers
• Jobs for local residents (driving
population growth)
• Knowledge transfer
Deloitt
e
PwC IBIS
World
Outlook
Economic
s
McKinse
y
CSIRO Australian
Govt
Southern
Downs
Oil, gas and
energy ✓ ✓ ✓ ✓ ✓ ✓ ✓
Food &
beverages ✓ ✓ ✓ ✓ ✓ ✓✓
Pharmaceutica
l, biotech and
medical
✓ ✓ ✓ ✓ ✓
Agribusiness ✓ ✓ ✓ ✓ ✓ ✓
International
education ✓ ✓ ✓ ✓
Tourism ✓ ✓ ✓ ✓ ✓✓
Mining
equipment
and/or
services
✓ ✓ ✓ ✓ ✓
Professional &
financial
services
✓ ✓ ✓ ✓
Distribution
services ✓ ✓ ✓
Advanced
manufacturing ✓ ✓ ✓ ✓✓

21. What needs to happen?
22

22. Need to
invest in
people
23
Strategies and programmes to
keep kids in schools
Targeted on-the-job
programmes
What else?
And what works??? Need to
experiment, learn, share
Business advice
(e.g. mentors, subsidised consulting,
incubators/accelerators, workshops,
export)
Skills attraction

23. Foster
strategic
links
between
growth
sectors
24
Research & Training
(prerequisite for growth –
how to grow?)
Food and processing
(global demand / healthy
lifestyles)
Health Care (ageing)
Tourism & Hospitality
(elevate existing role)
• Wellness tourism
• Health precinct
• = Improved amenities
(population impact)
• Retirement/aged care
• Local produce as a key
attractor
• Expand offer (e.g. food
trail; paddock to plate;
hospitality showcasing
region)
• Leverage events to
showcase region
activities, experiences
• Research partnerships
(internal & external) to explore
new tech (e.g. food/water
security, productivity, diversify
product)
• Targeted training / job ready
skills
• Agribusiness (business skills)
• Targeted training / job
ready skills
• Ed / research (centre of
excellence e.g. disability)

24. Invest in
Warwick
CBD
25
Investment into start-ups and co-working spaces
Revitalising local strips
Public realm investment
e.g. Lavington, Albury NSW
• Bypass led to large fall in traffic
• High vacancy rate
• Major public realm improvements – reseal road surface,
centre islands, landscaping, footpaths, drainage
• Supported $30m in new private investment, improved
safety, business confidence, activity levels
e.g. Start-up spaces (Thriving Places)
• Activate vacant properties
• Test new business ideas
• Increase foot traffic
• Improve opportunity for long term tenant
e.g. CoWS Near the Coast
• Coworking space is not just for cities (15% of coworking
space is in regional Australia, but most coastal)
• Affordable space for small business, local freelancers
• Regular workers and offers a range of events, hackathons
• Opportunity for Old community hall, learning centres, small
shopfront

25. Summary
26
Size of circle reflects
combined share of
employment and value
added
Powerful forces creating challenges and opportunities for regions
(improving connections to Toowoomba and Brisbane is a good idea)
But these forces also creating opportunities for Southern Downs which has strengths in:
• Food (production and processing)
• Tourism
• Distribution
• Health/Wellness
Partnerships between sectors – doing things which would not be done alone
Skills as the new iron ore (elevating local skills and importing skills)
Investing in Warwick CBD