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ECONOMIC ACTIVITY


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INTRODUCTION

The NSW economy continues to grow, though at a slower rate than the nation as a whole. There are many factors that influence the NSW economy — the growth is a result of increases in industry contribution to income, strong private business investment, and the increasing price of labour.


ECONOMIC GROWTH

In 2008–09 NSW recorded economic growth of 0.2% to $382.3 billion, as measured by the chain volume estimates of Gross State Product (GSP). GSP growth was slower than national Gross Domestic Product (GDP) growth of 1.1% for the same period. Since 2001–02, NSW GSP growth has been lower than national GDP growth, in part due to the resources boom driving the Western Australian and Queensland economies, the benefits in NSW having been more limited.

CONSUMER PRICE INDEX

The Consumer Price Index (CPI) is regarded as Australia’s key measure of inflation. It is designed to provide a general measure of price inflation for the Australian household sector. The CPI measures changes over time in the prices of a wide range of consumer goods and services acquired by Australian metropolitan households.

The all groups Consumer Price Index for Sydney increased by 3.0% in 2008–09, the same increase as was recorded in 2007–08 but lower than the 3.1% result recorded nationally in 2008–09. The fastest growing expenditure groups in Sydney were Housing (up by 6.0%), Health (5.3%), Alcohol and tobacco (5.0%) and Food (4.8%). Transportation was the only category to show a decrease (down 1.1%).



PRIVATE BUSINESS INVESTMENT

NSW private business investment expenditure in chain volume terms increased by 3.0% ($1.5b) between 2007–08 and 2008–09, a much smaller increase compared to the previous year (18% or $7.6b). Between 2001–02 and 2008–09, NSW private business investment as a proportion of the chain weighted GSP increased from 8.1% to 13.5%, to reach $51.7b in expenditure. During this period, investment in new machinery and equipment was the main driver of private business investment growth, contributing 50% of investment in 2008–09 compared to 46% in 2001–02.
TOTAL FACTOR INCOME

In understanding economic growth, it is useful to look at the contributions of different industries to growth in income. Total Factor Income (TFI) represents the value added by factors of production such as labour and capital. It is equivalent to gross domestic product less taxes plus subsidies on production and imports.

In 2008–09 the largest industry contributors to NSW's Total Factor Income were Financial and insurance services (15.3%), Manufacturing (9.3%) and Ownership of dwellings (8.0%).

From 2003–04 to 2008–09 the Total Factor Income of NSW industries grew (in current prices) by 6.4% per annum to $363 billion. Mining continued to have the highest annual average growth (22.4%), however it accounted for only a small proportion (3.4%) of Total Factor Income in NSW in 2008–09.

INTERNATIONAL MERCHANDISE TRADE

In 2008–09, exports from NSW accounted for 17% of total Australian exports at a total value of $38.8 billion, while imports into NSW accounted for 36% of total Australian imports at a total value of $79.0 billion. The major commodities exported (by value) were bituminous coal ($12.9b) and Copper ores and concentrates ($1.5b), while the major destinations were Japan ($12.6b), Korea ($3.3b) and the United States of America and China (both $2.7b).

Over the same period, the major commodities imported into NSW were Medicaments ($5.3b) and Motor vehicles for the transport of persons ($3.9b). The major countries of origin of imports into NSW were China ($17.8b), the United States of America ($10.0b) and Japan ($5.8b).

From 2007–08 to 2008–09, the value of the NSW international trade deficit decreased by 12.2% ($5.6 billion) to $40.2 billion. The decrease was the result of the growth in exports (28.9% or $8.7 billion) exceeding the growth in imports (4.1% or $3.1 billion).
BUILDING APPROVALS

In NSW in 2008–09, buildings to the value of $14,492m were approved. Just over half of the total value of approvals (52%) was for residential buildings.

Residential building approved

There were 23,860 dwellings approved in NSW in 2008–09, including conversions and dwelling units approved as part of alterations and additions or the construction of non-residential buildings. The majority (57%) were approvals for new houses, the remainder being for dwellings in new other residential buildings with more than one dwelling unit.

The highest number of dwelling approvals occurred in Blacktown LGA (1,529 of which 62% were for new houses) followed by Sydney LGA (1,214 of which less than 1% were new houses), Parramatta LGA (956 and 15%) and Ku-ring-gai LGA (704 and 25%).

Of the $7,568m in residential building approved in NSW in 2008–09, 49% was for new houses, 29% was for new other residential buildings (comprising more than one dwelling unit) and 22% was for alterations and additions to existing residential buildings (including conversions).

The LGA with the highest value of total residential building approved in 2008–09 was Sydney — $473.5m, comprising $2.1m of new houses, $425.1m of new other residential buildings and $46.3m of alterations and additions. Ku-ring-gai LGA had $304.0m of building approved ($94.4m new houses, $125.1m new other residential buildings and $84.6m alterations and additions), Blacktown LGA had $291.3m approved ($191.8m, $79.2m and $20.3m respectively) and Newcastle LGA had $207.2m approved ($59.8m, $106.7m and $40.6m respectively).

Non-residential building approved

The total value of non-residential building approved in NSW in 2008–09 was $6,924m. Three-quarters of these approvals ($5,215m) were for buildings owned by the private sector, comprising $2,809m worth of commercial buildings, $1,513m worth of other non-residential buildings and $893m worth of industrial buildings. Of the $1,709m worth of public sector owned buildings approved, other non-residential buildings comprised the majority ($1,435m) followed by commercial buildings ($183m) and industrial buildings ($91m).

Sydney LGA ($1,759m) recorded the highest value of total non-residential building approved in 2008–09 (of which $1,658m or 94% was for private sector owned buildings). Some $363m worth of non-residential buildings were approved in Liverpool LGA (28% privately owned), $263m in Willoughby LGA (24% privately owned) and $239m in Ryde LGA (66% privately owned).

TOURIST ACCOMMODATION

In the June quarter 2009, there were 591 tourist accommodation establishments in NSW which had between 5 to 14 rooms. These establishments provided 17,119 bed spaces and employed 2,736 persons. The total takings from this form of accommodation for the June quarter 2009 was $22.6m (3.4% of takings across all accommodation types). Cessnock LGA ($1.2m or 5.3% of all takings) and Shoalhaven LGA ($1.2m or 5.1%) were important areas for tourist accommodation.

In the same quarter, there were 1,422 establishments with 15 or more rooms providing 197,480 bed spaces and employing 31,550 persons. This accommodation type is responsible for the greatest proportion of takings (79% or $524.9m in the June quarter 2009). Establishments in Sydney LGA took in the lion's share of the NSW revenue ($233.3m or 44%).

In the June quarter 2009, there were 504 caravan parks in NSW which included 40 or more powered sites and cabins, flats, units and villas. These parks provided some 76,525 bed spaces and employed 3,270 persons. Total takings from this form of accommodation was $79.0m in the June quarter 2009 (12% of takings from all forms of accommodation). The LGA contributing the highest share to the NSW takings was Shoalhaven LGA ($6.6m or 8.4%).

In the June quarter 2009, there were 9,309 holiday flats, units and houses in NSW providing 50,403 bed spaces and employing 558 persons. In the same period, total takings from this form of accommodation was $23.3m. The LGAs contributing the highest to accommodation takings in this quarter were Byron ($2.8m or 12.0%) and Port Stephens ($2.7m or 11.5%).

In the June quarter 2009, there were 98 visitor hostels in NSW that included 25 or more bed spaces. These establishments provided 11,519 bed spaces and employed 718 persons. Total takings from this sector was $14.7m. The majority of hostel bed spaces (55%) and accommodation takings (59% or $8.6m) were in the Sydney LGA.


Data cubes with detailed statistics are available on the Downloads page.

DATA SOURCES

Australian Industry (cat. no. 8155.0)

Australian National Accounts, State Accounts (cat. no. 5220.0)

Building Activity, Australia (cat. no. 8752.0)

Building Approvals, Australia (cat. no. 8731.0)

Consumer Price Index, Australia (cat. no. 6401.0)

Engineering Construction Activity, Australia (cat. no. 8762.0)

House Price Index: Eight Capital Cities (cat. no. 6416.0)

Housing Finance, Australia (cat. no. 5609.0)

International Trade in Goods and Services, Australia (cat. no. 5368.0)

Labour Force, Australia (cat. no. 6202.0)

Labour Price Index, Australia (cat. no. 6345.0)

Lending Finance, Australia (cat. no. 5671.0)

Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0)

Research and Experimental Development, Businesses, Australia (cat. no. 8104.0)

Retail Trade, Australia (cat. no. 8501.0)

Sales of New Motor Vehicles, Australia (cat. no. 9314.0)

Tourist Accommodation, Small Area Data, New South Wales (cat. no. 8635.1.55.001)

Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0)