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Melbourne driving a third of Australia's economic growth: report

Xinhua, December 6, 2016 Adjust font size:

Melbourne is responsible for almost a third of Australia's economic growth, a report has found.

Australia's two most populated cities. Melbourne and Sydney, were responsible for more than half of Australia's gross domestic product (GDP) growth in the financial year ending in 2016 while regional areas continued to languish.

The Australian Cities Accounts report, released by Melbourne-based firm SGS Economics and Planning on Tuesday, found that Melbourne drove 28.4 percent of Australia's GDP growth in 2015/2016, the highest figure ever recorded for an Australian city.

Terry Rawsley, an economist at SGS Economics and Planning, said that while Melbourne continued to thrive, regional Victoria's growth fell by 1 percent, representing a fourth consecutive year of decline.

Rawsley said that a broad range of industries contributed to Melbourne's strong growth.

"Financial and insurance services and construction were the largest contributors."

"The construction industry's contribution to Melbourne's GDP was the second highest on record, driven by apartment construction and infrastructure projects."

"Manufacturing detracted from economic growth in 2015-16 and its share of Melbourne's economy is at a record low of 6.9 per cent."

The report found that manufacturing in Victoria has dropped more than 20 percent since 2005/06 due to a number of plants shutting down.

Rawsley said that the disparity in growth from state to state, which is larger than ever before, represented a huge challenge for the Reserve Bank of Australia (RBA).

"The RBA has to manage booming economies in Sydney and Melbourne while the rest of the country is struggling to grow in the face of a range of headwinds," Rawsley told News Limited on Tuesday. Endit