Economic Snapshot Spring 2012

ECONOMIC SNAPSHOT SPRING 2012

WAGGA WAGGA LIVESTOCK MARKETING CENTRE, BOMEN BUSINESS PARK • Largest sheep saleyard in Australia, 1.55M head sold in 2011/12 • Ranked 2nd for prime cattle saleyard in New South Wales, 120,000 head sold in 2011/12 • Stock sales value, $258M in 2011/12 • Contributes $54M and 250 employment positions to the regional economy

WAGGA WAGGA ECONOMY OVERVIEW Wagga Wagga is the heart of the Murrumbidgee Region and acts as the primary population, business and industry hub. Wagga Wagga supports a highly diverse and dynamic economy that services an area that goes well beyond its Local Government boundaries. Wagga Wagga is a highly accessible city through its connectivity with major cities, such as Sydney and Melbourne, by road, rail and air, making it a strategic centre for interstate transport which would be significantly enhanced by the proposed Riverina Intermodal Freight and Logistics Hub. The region offers a unique quality of life that is unparalleled in its natural beauty, affordability of housing, diverse employment opportunities and a wide offering of community infrastructure, services and lifestyle activities.

Professional employment continues to be an integral component of the Wagga Wagga economy with a significant increase in education assets led by Charles Sturt University and TAFE NSW Riverina Institute investing over $100M in Wagga Wagga. Redevelopment of health assets such as the $282M investment at the Base Hospital will improve Wagga Wagga’s stature as the health care provider of the area and result in additional investment in the burgeoning health precinct. This is already evident with investment in medical facilities in the surrounding area already exceeding $9M. Wagga Wagga’s industrial sectors continue to grow steadily, evidenced by the recent completion of a $60M Renewed Metal Technologies (RMT) plant for the recycling of lead-acid batteries and the current construction of the $63M Riverina Oils & Bio Energy Pty Ltd (ROBE) facility designed to crush 170,000t of grain per year. The ROBE plant is currently the largest value-added agricultural investment in Australia.

WAGGA WAGGA PROFILE Statistic Period Population (no.)1 June 2011 Labour Force (no.)2 June Q 2012 Unemployment Rate (%)2 June Q 2012 3 Gross Regional Product ($M) (GRP) June 2011 YTD Key Industry Sectors GVA3 Public Administration & Safety ($M) June 2011 YTD Rental, Hiring & Real Estate ($M) June 2011 YTD Manufacturing ($M) June 2011 YTD Financial & Insurance Services ($M) June 2011 YTD Health Care & Social Assistance ($M) June 2011 YTD Housing Affordability Median Property Prices4 House June Q 2012 5 Unit June Q 2012 Median Weekly Rents4 House 3 Bed September 2012 Unit 2 Bed September 2012 Median Monthly Loan Repayments3 2011 Earnings Average Annual Individual Income (taxable)6 June 2009

Indicator 61,509 34,967 5.57% $4,050M $891.8M $400M $313M $274M $270M

$297,166 $320,000 $330 $250 $1,549 $51,043

ABS 2011 Census ERP pop.

DEEWR Remplan 4 RP Data 5 Abnormal unit sale increasing median price. Typical medium price for previous quarters has been $220,000 6 ABS National Regional Profile 2006 -2010 (next release early 2013) 1 2 3

POPULATION 80000 70000

Forecast Population

Wagga Wagga is one of the fastest growing regional cities in New South Wales, having experienced average annual population growth of 1.3% p.a. since 2006 to 61,509 (ABS 2011:ERP) persons in 2011. Wagga Wagga’s historical population trends are testimony to the strength of the local economy, which has been able to support strong population growth with sufficient employment opportunities and job growth over the past 10 years. Over the next 20 years, Wagga Wagga is expected to continue to grow steadily at an average annual rate of 1.1% p.a. to almost 80,000 residents by 2031.

60000 50000 40000 30000 20000 10000 0 2006

2012

2020

2031

LABOUR FORCE Wagga Wagga had a total labour force of 34,967 people as of June 2012, an increase of 811 or 2.3% when compared to June 2011. In the 6 month period to December 2011, Wagga Wagga’s unemployment rose to 5.6%. Throughout the global economic downturn, Wagga Wagga maintained relatively low unemployment rates and continued labour force growth. The resilience of employment in the Wagga Wagga economy at this time was due to the low reliance of the region upon the finance and insurance sector and the diversity of Wagga Wagga’s economy.

Statistic

June Q 2012

Change 12mths

Labour Force (no.)

34,967

811

Employment (no.)

33,020

660

Unemployed (no.)

1,947

151

Unemployment rate (%)

5.6%

0.2%

Source: DEEWR (2012)

KEY PROPULSIVE SECTORS Certain economic sectors provide additional benefits to the wider Wagga Wagga economy. These sectors are called Key Propulsive Sectors because, for example, they are beneficial in terms of high wages for skilled workers or purchasing products from other local businesses. Wagga Wagga’s top three Key Propulsive Sectors are: Public Administration/Safety, Manufacturing, and Health Care/Social Assistance.

Four different economic indicators are used to determine Key Propulsive Sectors: • Backwards Linkages - How much a business spends locally on goods and services per dollar of output; • Regional Exports - The value of goods and services exported outside of the region that have been generated by local businesses; • Employment - The number of people employed by businesses/organisations; • Value Added - Calculated by subtracting local expenditure and expenditure on regional imports from the turnover generated by an industry sector.

Across these measures of economic activity the key propulsive drivers of the Wagga Wagga region’s economy, in descending order from the most significant, can be seen in the table opposite.

Industry Sectors

Backward Linkages

Public Administration & Safety Manufacturing Health Care & Social Assistance Education and Training Construction Retail Trade Financial & Insurance Services Rental, Hiring & Real Estate Services Professional, Scientific & Technical Services Arts & Recreational Services Transport, Postal & Warehousing Wholesale Trade Mining Other Services

Exports

Employment

ValueAdded

EMPLOYMENT BY INDUSTRY Wagga Wagga has a diverse employment base, a unique feature for a regional city. Particular strengths of the employment base include public administration and safety which is more represented than in other regional areas because of the Army Recruit Training Centre (ARTC) at Kapooka and the Royal Australian Air Force (RAAF) Base. Another unique feature of the Wagga Wagga employment base is the high proportion of manufacturing which is also a Key Propulsive Sector (representing 8.6% of the total workforce). While retail trade is the largest employment sector in the economy, this high proportion of workers is the result of Wagga Wagga’s place as the retail catchment for a much larger population base of the Murrumbidgee and the one million visitors to Wagga Wagga annually.

Employment

Retail Trade Health Care & Social Assistance Public Administration & Safety

1.0%

2.7%

2.4%

1.6% 1.5%

Education & Training

0.8% 0.1%

Manufacturing

13.6%

Accommodation & Food Services Construction

3.7%

Transport, Postal & Warehousing 3.7% 12.4%

3.8%

Other Services Agriculture, Forestry & Fishing Professional, Scientific & Technical Services

4.4%

Wholesale Trade Administrative & Support Services 11.9%

4.5%

Financial & Insurance Services Information Media & Telecommunications

5.1%

Rental, Hiring & Real Estate Services

10.8%

7.4%

Electricity, Gas, Water & Waste Services

8.6%

Arts & Recreation Services Mining

Source: Remplan 2012

GROSS REGIONAL PRODUCT The Gross Regional Product (GRP) for Wagga Wagga is $4,050M. The GRP has been calculated using the expenditure method. This is defined as the total value of goods and services produced in the region over a period of one year.

GRP Expenditure Method

$M

Gross Value Added

Industry Sector

Contribution ($M)

Public Administration & Safety

$891.81

Rental, Hiring & Real Estate Services

$400.03

Household Consumption

$2,574.212

Government Consumption

$818.172

Manufacturing

$313.23

Private Gross Fixed Capital Expenditure

$1,182.570

Financial & Insurance Services

$274.69

Health Care & Social Assistance

$270.47

Public Gross Fixed Capital Expenditure

$237.526

Education & Training

$229.10

Retail Trade

$203.04

Gross Regional Expenses

$4,812.480

Wholesale Trade

$181.77

Transport, Postal & Warehousing

$178.05

Construction

$167.09

Professional, Scientific & Technical Services

$112.74

Accommodation & Food Services

$106.03

Agriculture, Forestry & Fishing

$101.94

plus Exports

$2,974.379

minus Domestic Imports

-$3,135.145

minus Overseas Imports

-$601.267

Gross Regional Product

$4,050.447

Source Remplan Feb 2012

Another way of measuring and thus gauging economic activity is to determine the “value-added” of industrial sectors. Value-added represents the economic value that is added by each industry sector and is calculated by subtracting local expenditure and expenditure on regional imports from the output of an industrial sector.

Contribution ($M)

Information Media & Telecommunications

$93.03

Administrative & Support Services

$84.49

Electricity, Gas, Water & Waste Services

$80.90

Other Services

$66.16

Arts & Recreation Services

$11.82

Mining

Source: Remplan 2012

$3.94

FEATURED INDUSTRY SECTOR: BOMEN BUSINESS PARK The Bomen Business Park, located 12k north of the Wagga Wagga Central Business District, is a 2,040 hectare industrial estate with excellent access to infrastructure as well as large tracts of available industrial property. A diverse array of companies such as Teys Australia (Wagga Wagga’s largest employer), Heinz Watties and Southern Oil Refining are all located within the Bomen Business Park.

The Wagga Wagga Livestock Marketing Centre, which is the largest sheep selling centre in the southern hemisphere, was one of the first businesses to operate from within the business park, commencing operation in 1979.

Some underway or recently completed investments in the Bomen Business Park include: • Riverina Oils & Bio-Energy (ROBE) the largest value adding agriculture investment in Australia. In terms of investment, Stage 1 of the project costs $63M and provides 65 jobs. Annual revenues generated by full oilseed crushing and refining capacity are expected to exceed $125M. • Renewed Metals Technology (RMT) with capital expenditure of $60M and 55 jobs, specialises in the recovery of renewable resources. Utilising the world’s leading technology to turn potentially hazardous waste into new resources, RMT is creating a cleaner environment and better future for Australia.

Wagga Wagga City Council is one step closer to developing the Riverina Intermodal Freight and Logistics Hub (RIFL) following the $14.5M funding announcement by Minister for Regional Development Simon Crean in June 2012. The City had been pursuing funding for the key piece of regional economic infrastructure as part of the Federal Government's Regional Development Australia Fund. As a result of its development, Wagga Wagga will continue to be able to build on its ideal geographic location to attract large scale industry that requires freight transport and distribution to be cost effective. The RIFL Hub will provide freight consolidation, logistics support and rail transport services for businesses throughout the Riverina and Murray regions.

The $58M project involves the construction of new major rail and road infrastructure and a freight terminal on 80 hectares of land at Bomen.

Funding for the project comes from the Federal Government, Council and private industry. The construction of the RIFL Hub will create up to 200 jobs during the two year construction phase and potentially 65 jobs once operational.

MEDICAL PRECINCT The Wagga Wagga Base Hospital master plan was created to ensure the community receives first class health services well into the future.

Resulting in the investment of over $280M in Wagga Wagga Base Hospital in a three phase redevelopment which commenced in 2011 and is to be completed in 2016. This major redevelopment has already been the catalyst for additional investment in medical centres in the surrounding area enhancing Wagga Wagga’s stature as the centre of services in the Riverina. Designed to expand the quality and capacity of health related facilities in Wagga Wagga, the investment has already resulted in additional medical facilities in the surrounding medical precinct costing over $9M. • Day Surgery The proposed day surgery centre will be located next to Calvary Hospital. The facility represents a $3.3M investment for a total building area of 1,700m2 on a 4,000m2 property which will employ three doctors.

• University of Notre Dame Rural Clinical Medical School Construction is expected to commence on this new $2.8M facility in 2012 and will be completed in mid-2013.

• Assisted Living Facility This $3.4M investment creates 26 units of housing for people suffering from dementia.

INVESTMENT The three year horizon has commercial and industrial investment in the order of $487M across both the public and private sectors. Public entities such as those at Charles Sturt University and at the Wagga Wagga Base Hospital represent the largest proportion of this investment.

Key private sector projects already approved include: • International Motel, Lake Albert Road The total investment in this site will be $8.5M and when complete, it will feature 81 hotel units, a 100 seat restaurant, a 250 seat conference centre and 125 parking spaces on 7,729m2 of land.

• Murrumbidgee Mill, Edward Street This central Wagga Wagga project during the peak of construction will have up to 150 people working on the site with an investment of $20M. The project will contain penthouse apartments, townhouses, specialty shops, conference facilities and a supermarket.

• Masters Home Improvement, Hammond Avenue Scheduled to be completed in 2013, this project represents a $23M investment.

OUR QUALITY OF LIFE Wagga Wagga is located in a region which spans the plains of the Riverina to the iconic Snowy Mountains. The Murrumbidgee River winds through the heart of the City. You can explore the City’s heritage buildings or follow the Wiradjuri Walking Track, named after Wagga Wagga’s indigenous inhabitants. There are beautiful lakeside bike and walking tracks, and our award-winning Botanic Gardens. The Wagga Wagga Art Gallery regularly mounts new exhibitions in addition to its standing collection. The City is also home to the National Art Glass Gallery, two museums, three theatres and two outdoor amphitheatres.

The City’s food and wine is wonderful. The City offers diverse organic locally grown produce, good coffee, gourmet restaurants, boutique wineries and a micro-brewery. The Wagga Wagga region includes lakes and rivers which are perfect for fishing, swimming, canoeing and kayaking. Australia’s alpine areas are also nearby for skiing, camping and bush walking.

Wagga Wagga is known as “the city of good sports”. Leading sporting professionals have been produced here, including cricketer Mark Taylor; rugby league footballers Peter, Steve and Chris Mortimer; and Australian Rules footballers Cameron Mooney and Paul Kelly to name just a few!

There are 400 events every year. Festivals range from the smooth sounds of the Wagga Wagga Jazz and Blues Festival to the hugely popular Food and Wine Festival and the glittering Gold Cup racing carnival.

NATIONAL BROADBAND NETWORK The rollout of the National Broadband Network (NBN) for Wagga Wagga is scheduled to begin in June 2013. The NBN is a new fibre optic connection that will give users access to world class high speed broadband, a core infrastructure of the new century. This type of connectivity is an essential tool for Wagga Wagga’s businesses to remain competitive and continue to grow and for residents to enjoy its many other benefits.

As a matter of practicality for Wagga Wagga’s residents and businesses, the NBN has the potential to facilitate: • Healthcare providers to diagnose, monitor and provide ongoing care to patients remotely, saving time and money for those who currently have to travel long distances to receive healthcare.

• Education opportunities less restricted by proximity to the nearest school, university or educational institution.

• Small Business to increase online trade and access markets both nationally and internationally regardless of whether they are located in cities or country Australia.

• More in-home information and entertainment services such as video on demand, IPTV (television from internet providers, not just broadcasters) and high resolution video.

• Increased teleworking as well as potential flow-on social and environmental benefits through reduced commuting.

CONTACT US For more information or to explore the opportunities in the Wagga Wagga region, please contact: Wagga Wagga City Council - Commercial & Economic Development Directorate Phone: 1300 292 442 Fax: (02) 6926 9159 Email: business@wagga.nsw.gov.a www.businesswaggawagga.com.au twitter.com/waggaed