One-third of Australian locations in recession: report

One-third of Australia is in recession with a shrinking number of locations generating most of Australia's wealth, according to a PriceWaterhouse Coopers (PwC) research revealed on Monday.

Accounting giant PwC said close to one in every five Australian dollars of Australia's national income is produced by just 10 locations out of 2,214 in Australia, led by the central business districts (CBD) of Melbourne and Sydney as well as the iron-ore- rich Pilbara region in Western Australia, Fairfax Media reported.

PwC Director of Economics and Policy Rob Tyson told the Australian Financial Review the findings are critical as Australian businesses and governments spend close to 350 billion Australian dollars (272.19 billion U.S. dollars) per year on investment.

"More and more locations are suffering declines, while a key handful of locations are becoming more and more important," Tyson said.

Tyson said 35 percent of locations around the country were effectively in recession in the last financial year, with trends identified in the PwC model likely to worsen as growth in Australia's economy is effectively coming from less than 0.5 percent of Australia's landmass.

The PwC report said the Australian resources boom and the high Australian dollar have further narrowed Australia's economy, noted by the number of manufacturing regions in Australia having declined sharply.

The PwC predicts continuing decline in the resources and manufacturing sectors means further locations could contract.

"Grappling with this realty will become one of the most challenge questions facing business and government, explaining patchy policy, investments and business performance across Australia." PwC said. Endi