Leading economist on Geelong: Amber ail for local economy

By John Van Klaveren
AMBER warning lights are flashing on Geelong’s economy, a new report has revealed.
Report co-author and economist Peter Brain said Geelong lagged behind many Australian regions in several key economic indicators.
Geelong was a classic case of a region missing the benefits of the mining boom, he said.
National Economics prepared the State of the Regions report for Australian Local Government Association.
The report said Geelong underutilised its most competitive enterprises – potential medical infrastructure and education and training facilities.
Business income declined 8.5 per cent between 2010 and 2012, compounding a 3.8 per cent drop between 2007 and 2010.
Non-residential and engineering construction fell 17 and 16 per cent respectively in 2012.
Dr Brain said Geelong rode out the global financial crisis but had been “deteriorating” since.
Unemployment increased a further one per cent and more working-age residents were accessing social security, he said.
“Geelong is not doing as well as it was. It’s a clear case of being adversely affected by the mining boom.
“Geelong is not getting the huge input other regions are getting from the mining boom.
“Gross regional product was running at 2.2 per cent a year but that’s halved to 1.3 per cent.
“The underlying economic base is declining. The quality of jobs available and level of housing affordability is decreasing.”
Dr Brain said housing affordability was at a “trigger point” of 40 per cent.
“Beyond that you will be getting housing shortages because people can’t get good jobs to support mortgages.”
Dr Brain said Geelong’s economy was reflected in the troubles of the car industry and suffering from the Australian dollar’s high exchange rate.
“The region is ageing quite rapidly. The increase in the 55-plus age group is a big negative for future growth.
“Residential construction is holding up but non-residential construction has slipped back to where it was before the stimulus package.
“There’s no red lights for the Geelong economy yet but there are definitely a few amber lights flashing.”
The State of the Regions report called for an independent commission of inquiry into regional development.