Chat with us, powered by LiveChat

Economic Growth in the Northern Beaches Likely to Race on – ICMS Economic Expert

Economic Growth in the Northern Beaches Likely to Race on – ICMS Economic Expert

June 20, 2018

Creating tourism and public ‘hotspots’, embracing the digital age and recognising the potential market of the older generation are among three opportunities for expanding the Northern Beaches economy.

This is the opinion of International College of Management, Sydney (ICMS) economics lecturer Dr Hemanath Swarna, who recently gave an overview of the Northern Beaches’ economic prospects.

He found that while a lower than national average unemployment rate and robust economic growth is good news, there is room for improvement to soften the economic troughs related to tourism and retail.

“Barring a national or global economic slowdown, there could still be strong positive growth in the Northern Beaches in the coming few years,” Dr Swarna said.

Underpinning this view is the growth trend in the Northern Beaches’ gross regional product (GRP), a measure of the size of the region’s economy.

“GRP growth in the last two years exceeded the New South Wales average,” Dr Swarna said.

“Between 2015 and 2017, GRP rose almost 6% on average per year, from $18 billion to almost $20 billion/year. In contrast, it took more than 10 years between 2001 ($15.4 billion) and 2013 ($17.2 billion) for an equivalent growth in GRP. The Northern Beaches Hospital project contributed to the rapid growth. The challenge is to sustain momentum and create a ‘spread effect’ across the region.”

The Northern Beaches Council area is located along a stunning coastline between 10 and 30 kilometres northeast of Sydney CBD. Tourism activity, a key economic driver, influences the local economic cycle.

“This makes the business cycle in the Northern Beaches distinct from that of the central business district of Sydney (CBD), where the financial and professional services industries dominate,” he said.

“In addition to the general business cycle, there are the weekly peaks that occur on weekends and public holidays, driven by tourist inflow. A notable and obvious trough is the winter months. The retail industry has been central to the Northern Beaches economy, and the ebb and flow of domestic and international visitors affect it,” he said. “Other peaks and troughs are related to the property boom and construction and real-estate industries.”

Dr Swarna advised small businesses on the Northern Beaches, particularly in the retail and food industries, to investigate strategies for attracting visitors into the region and for getting residents to go out more during the workweek troughs.

“Jazz up marketing and offerings to increase foot traffic: diversify the type of eateries, randomise menus or boutique merchandise on a weekly or seasonal basis. Exploit flash-mob marketing to make your business stand out,” he said, adding that “if your budget allows you, hire a good public relations companies to help you build your brand and increase exposure and sales”.

He recommended creating hotspots (areas of high activity) with social activities and festivals that could draw foot traffic during winter and other seasonal troughs. Locating such hotspots in different parts of the Northern Beaches could spread out foot traffic beyond the nexus of Manly, Brookvale and Dee Why. The duration of festivals could be lengthened, he said, noting that the annual Manly food and wine and jazz festivals are normally held for just a few days. Moreover, the month-long Vivid festival could be introduced here.

Retaining visitors for longer hours in the Northern Beaches could moderate daily troughs, too. Dr Swarna proposed creating more sheltered public areas where members of the public could interact with each other, work and be creative. “People would contribute more to economic activity if they have more reasons to be outside than to be just inside shops or offices. Why not develop informal workplaces outdoors?” He stated that professionals and technical workers make up a significant proportion of the Northern Beaches workforce.

The flavour of the retail trade could also be transformed.

“Foster a regional economic identity established on community and nature. Inject joy into the economy – run a café that makes customers feel at home or motivate discovery and self-fulfilment,” he said. “Tie up with a local magician to teach them tricks or hold a competition for the most beach trash collected, incentivised with discounts. Keep people involved and staying longer and later.”

Dr Swarna identified other opportunities for small businesses. These include exploiting online business strategies to trim costs and reach the region’s largest age group, the tech-savvy 35-50-year-olds; lowering the cost of doing business through peer-to-peer lending services; and catering to an often-overlooked market: the seniors. The largest increase in persons in the next ten years is forecast to be in ages 75-79.

What to do about cyclical downturns in construction? Dr Swarna pointed out that the education industry in the Northern Beaches has now become the third largest employer, up from sixth spot a decade ago. Growth in this sector could help compensate for a slow-up in other sectors.

There is also good news for graduates entering the local economy. At 2.4% (2017), the unemployment rate in the Northern Beaches has consistently been one of the lowest nationally and in New South Wales.

“Provided fresh graduates fit the job profiles that are in demand in the labour market, such as retail, hospitality, and the medical and social services sectors, job prospects appear more favourable than elsewhere in Greater Sydney and the state,” Dr Swarna said.

The flipside is that competition for jobs, particularly full-time ones, is high. To overcome this, Dr Swarna advises graduates to be creative and capitalise on other options. “Invade an existing market as a nimble micro business that’s light on cost. Stimulate fresh demand or satisfy an unmet one – be a home organiser, transcribe medical records or run a tour or an espresso cart.”

  • Dr Hemanath Swarna holds a PhD in Ecological Economics from the University of Queensland and is a lecturer at the International College of Management, Sydney (ICMS) located in Northern Beaches, NSW, Sydney.


News, Academic