HUNTER INSIGHTS DASHBOARD
Economic Update - October 2023
The Institute for Regional Futures’ Insights Dashboard tracks socio-economic conditions in the Hunter. The dashboard is based on the Hunter Research Foundation Centre’s databank collected over 60 years, the most comprehensive collection of any region in Australia.
This new dashboard of economic updates is designed to give decision-makers in government, industry and the community the latest data on the Hunter’s performance across key indicators. The dashboard draws upon national and regional data sources to deliver insights into the Hunter region. These updates will be provided three times per year, in addition to the Hunter Insight Series.
The dashboard is a snapshot of the total data collected by the Institute for Regional Futures. For more information, please contact irf@newcastle.edu.au.
International and national conditions
- National: Economic growth, measured through the Gross Domestic Product, has maintained a quarterly increase of 0.4%, largely driven by increased public capital investments, capping off a 2.1% increase over the last 12 months.
- International: A 4.3% rise in exports, has offset a 0.7% increase in imports for the last quarter - both still showing continued strong growth post-COVID.
- National: Consumer Price Index is still rising, but down to +0.8% in the March quarter. Business conditions are strong and upward trending, whilst business confidence is below long-run averages.
Hunter conditions
- Hunter labour market (employment): 11,500 jobs added in the first six months of 2023. Latest quarter shows growth in employment in public services and consumer facing sectors, and declines in agriculture, mining, manufacturing, and utilities.
- Hunter labour market (unemployment): The unemployment rate continues to drop to 2.4% in July 2023. The level is at record lows.
- Hunter housing market: Prices in the Hunter remain mixed, with declines in some LGAs offsetting continued increases in others. Overall median house prices are down 2% for the first quarter of 2023. Rental prices are showing the first signs of peaking, with second quarter results ranging from -1.5% to +6.5% across the Hunter LGAs.
Contents
National economy
Trends - After the swings of COVID during 2022, the national economy returned to a more normal and targeted level of growth of around 2% per annum.
Latest - The latest data points show a 0.4% growth for each of the first two quarters of 2023, down from a 0.7% growth for the last quarter of 2022.
At the national level, ABS data shows a quarterly rise in GDP of 0.4% for the second quarter of 2023, continuing previous quarter’s trend. GDP per capita fell 0.3% due to an uptick in migration post-COVID. The ABS Australian National Accounts: National Income, Expenditure and Product highlight the following points:
- Domestic demand has remained strong and been a primary upward driver of growth, providing a 0.7% increase in the quarter.
- Capital investment was the strongest contributor to domestic demand, providing a 0.5% point contribution to GDP growth.
- Public investment increased by 8.2%. New machinery and equipment including motor vehicles was the biggest contributor.
- Consumption expenditure had a subdued 0.1% impact on GDP. There is an increasing shift away from discretionary expenditure to essential goods and services.
- Net trade was an upward driver this quarter due to exports increasing faster than imports. There was a 4.3% rise in exports, offsetting a 0.7% increase in imports. This was the opposite case in the previous quarter.
Prices of traded commodities, especially rural goods, liquified natural gas and coal, have been falling is having a large impact on profits for the mining industry. Domestic prices have been rising strongly, mainly due to a tight labour market, fuelling price increases in services. (see ABS for more info)
Business performance
The NAB Group Economics update for August 2023 shows:
- Business conditions rose in August both for NSW and Australia. While down from earlier peaks, resilience was maintained throughout the middle of the year. Trading conditions, profitability and employment conditions also rose.
- Business conditions at both state and national levels are measuring above long-run averages. Capacity utilisation was above 85%, reflecting a tight balance between supply and demand.
- Business confidence measures are more mixed. While both state and national levels have recovered from negative values they both remain well below long-run averages. Of relevance for the Hunter is the marked change in business confidence in the mining sector from high positive values earlier in the year to negative values in the last update. Manufacturing, construction, transport, and utilities sectors are still in positive territory.- The retail sector is the largest negative weight on business confidence, and part of the result is due to clearing of backlogs. This result also applied to sales and forward orders.
Data source: NAB Group Economics
Household spending
The ABS Monthly Household Spending Indicator from August 2023 for New South Wales indicates:
- An increase in household spending of +2.9% compared to August 2022 in current prices.
- An increase in spending on services of +6.4% and a decrease on goods of -1.0% since August 2022.
- An increase in non-discretionary expenditure of 7.2% with a fall for discretionary expenditure of -1.6%.
Prices have stabilised compared to the large increases seen in the previous 12-24 months. In the July quarter, the consumer price index rose 0.8%, topping off a 12-month rise of 6%. This is down from a peak of near 8% in December 2022. While previously food and electricity prices drove the major overall increase in the index, rents and international holidays are now the primary drivers.
Hunter
Employment
The 3-month moving average of employment grew strongly in the lead up to July 2023, with 11,500 full-time jobs added in the Hunter Valley region in the previous 6 months. The Hunter Valley region added 1,010 full-time jobs in July 2023, down from 3,600 jobs in April 2023. Employment statistics are collected at the Statistical Area Level 4, including the SA4s of ‘Hunter Valley excluding Newcastle’, and ‘Newcastle and Lake Macquarie’, but excluding the Mid-Coast LGA which is classified in the Mid North Coast SA4 region.
Employment grew by 7.7% over the year to July, well above jobs growth for NSW which was also strong at 4.2%. The region’s growth rate was slightly down compared to a year prior. Part-time employment was even stronger, with a 21% growth in the 12 months to July in the Hunter. This corresponded to a 39% reduction in the number of unemployed.
At the state level, part-time growth was much more moderated, dropping from an annual growth of 12% at the end of 2022, to a growth of 0.5% for the 12 months to July 2023. Although GDP growth has moderated nationally and internationally, employment has continued to expand. However, recent data on hiring intentions and vacancies suggests that future job growth may slow.
Data source: ABS Labour Force, Australia,Detailed Data in tabular format available here.
Unemployment
The Hunter Valley’s unemployment rate has continued to plunge since the highs reached in COVID. The 3-month moving average shows unemployment is now at 2.4% as of July 2023, down from 4.5% in July 2022. This figure is slightly less than the NSW-wide rate of 3.0% in July 2023, which has also only slightly declined in the last twelve months (down from 3.9%). The decline in the unemployment rate is partly driven by the increasing labour force participation rates over the period. That is, more people are seeking employment. The region’s youth unemployment rate has also seen record lows, with the unemployment rate for July 2023 at 2.9%. This figure is now below the NSW-wide rate of 3.7%. Historically, a key challenge for policymakers is to achieve a low rate of unemployment without fuelling excessive increases in wages growth and inflation. Economists call the lowest rate of unemployment that achieves this the ‘non-accelerating inflation rate of unemployment’ or NAIRU. Current estimates are that this rate is roughly 5% in Australia. These values are expressed with a 3-month moving average.
Data source: ABS Labour Force, Australia,Detailed
The last 12 months of data show that the Hunter is trending towards significantly lower levels of unemployment than the NSW average. The Upper Hunter has seen large decreases in unemployment, higher than the Hunter average.
Data source: ABS Labour Force, Australia,Detailed
Employment - by industry
Long-term trends in employment show strong growth in service sector jobs, especially health and social services in the Hunter Region. The trends reveal a decline in industries historically central to the region’s identity, such as manufacturing and agriculture. In contrast, the number of mining jobs has still grown over the last two decades, reflecting the industry’s expansion.
Although short-term fluctuations occur, the long-term trend indicates a significant transformation in the region’s employment landscape. The below employment data is measured in full-time equivalents (FTE). FTE represent the combined workload of full-time and part-time employees as if they were all working full-time.
Data source: ABS Labour Force, Australia,Detailed
The last 3 months of data (Feb - May 2023) present a mixed picture, with earlier growths in mining and manufacturing jobs now showing declines. Professional and financial services saw the largest declines in the service sector whereas public services, health and education saw large increases. Interestingly, given the national economic data on consumption, the region’s retail trade and hospitality sectors saw large increases in employment of circa 3% in a quarter.
Data source: ABS Labour Force, Australia,Detailed
House prices
Data source: NSW Govt Rent and Sales Report
The data currently paints a mixed picture on housing prices across the region. The big increases seen post COVID have only started to recede in some LGAs. Hunter median prices fell by 2.2% in the second half of 2022 and another 2% in the first quarter of 2023. Initial data provided for the second and third quarter tend to support a further decline in line with this trend.
The fall contrasts sharply with the region’s yearly growth rate of over 20% per annum in 2021. Falls were led by the Port Stephens LGA, where house prices fell 4.3 per cent over the year, although a rebound is now visible. In Newcastle and Lake Macquarie, prices fell by 5% over the year, with falls of 3% in Newcastle for the last half-year. Singleton saw a drop of 16% in the last quarter of last year, but this is offsetting a spike in mid-2022 resulting in a +6% increase over 12 months.
Among Hunter LGAs, the Upper Hunter showed the largest price increases of 13% in the last 12 months. Muswellbrook is the only LGA that is not yet recording declines in house prices over the preceding 24 months. Prices here have seen growth of 27% in 2011 and 14% in 2022.
Data source: NSW Govt Rent and Sales Report
Rental prices
Rental prices may have just started to peak, with price rises reflecting those that have been seen in house sales for some time. The acceleration since 2021 is still high, with most Hunter LGAs seeing faster rises than Sydney or NSW.
The data below is for the median weekly rent for 3-bedroom stand-alone houses. Rental prices have tempered some of their increases. For example, the 12 months to March showed increases in the range of 14-26% across LGAs in the region whereas the most recent quarter (to June 2023) has seen decreases in some LGAs to give 12 months to June result of 1-6% increase. Newcastle and Port Stephens have seen the highest rises over this time.
Data source: NSW Govt Rent and Sales Report. Data indexed to start 2009.
According to the last period of data, the Hunter is still experiencing price increases that are outstripping the state and Greater Sydney median for most LGAs. The data below is for the median weekly rent for 3-bedroom stand-alone houses in the 6 months to June 2023. No data point is reported for Dungog and the Upper Hunter Shire due to low volumes of rentals in the last period. Singleton has had the largest increase with a 7% price increase in 6 months.
The NSW median price increase was 0%, whilst Greater Sydney had an increase of around 2% over the 6 months. However, rent increases have abated. In the previous period (to March 2023), median rent increases were 13% in the Upper Hunter, 6% in Port Stephens, 5% in Maitland and 4% in Newcastle and Cessnock.
Data source: NSW Govt Rent and Sales Report
For more detail on the Hunter Insights Dashboard, please contact the Institute for Regional Futures
* The data presented here for the Hunter Region includes the local government areas (LGAs) of Cessnock, Dungog, Lake Macquarie, Maitland, Mid-Coast, Muswellbrook, Newcastle, Port Stephens, Singleton and Upper Hunter. However, the ABS collects and reports data by Statistical Area which does not fully align with this definition. The Statistical Area Level 4 (SA4) classification, commonly used for reporting economic statistics includes the above LGAs in two SA4 areas comprising the Hunter Valley region, but classifies the Mid-Coast LGA in the Mid North Coast SA4.
Suggested citation: Institute for Regional Futures. “Hunter Insights Dashboard, Economic Update – October 2023.” University of Newcastle. October 2023. URL.
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