In 2019 Greater Sydney welcomed 44.9 million visitors who spent $22.8 billion, employing more than 135,000 people48. With closed borders international tourism is expected to register its worst performance in terms of the number of travellers and revenue, since 195049. The impacts of closed borders are widespread and include secondary sectors such as hospitality, food and beverage, arts and culture and retail.
The decline in international students in Greater Sydney has dramatically reduced university revenue. In turn, this will affect more than 95,000 full-time equivalent jobs and future research and development that the international education sector supports50. Analysis estimates that the pandemic will result in a decline in total spending on research at universities across Australia from $11.3 billion to potentially $7.3 billion51.
Emerging impacts across sectors
Longer term impacts are still emerging for some industries. Those more dependent on the pandemic's duration and severity will continue to require government support while others could help to drive economic recovery.
The construction industry, which accounts for almost 190,000 jobs in Greater Sydney52, is yet to feel the full impacts of the pandemic. New dwelling approvals dropped to 6,900 between April and June 2020, from around 7,700 in the same period in 2019. This is 40 per cent down from the record highs of around 11,600 over the same period in the previous four years53.
Industries experiencing an expansion of their operations are being driven by shifting consumer demands and the acceleration of digital services. Health and wellness, retail-as-a-service, e-commerce, data storage, advanced manufacturing and fintech are all growth areas. For example, demand for data centres in Greater Sydney is growing despite the remoteness from other cities and economies across the Asia Pacific. This growth is driven by local demand from financial services, internet and tech companies and Greater Sydney is well placed to accommodate future growth in this regard54.
At a metropolitan scale the pandemic is exposing the underlying complexities of Greater Sydney's economic ecosystems and supply chains, such as:
- limitations for essential goods, particularly to respond to the health crisis
- susceptibility of those heavily reliant on only a few sources, compared to more diversified supply chains.
The pandemic has seen the production of essential services brought closer to home, as many businesses have retooled to provide medical goods including ventilator solutions.
Across the globe businesses are looking to diversify supply chains and relocate strategic activities to better manage risk. This means businesses are seeking more local capacity and contingency in and around cities. Greater Sydney's 280 industrial precincts are well placed to respond to this demand.
Skills, training and economic recovery
Analysis of Greater Sydney's economic resilience reveals a greater need to match education with the skills required by industry. Programs that develop skills and training must not only cater for people leaving school and vocational education and training. They also need to meet the training and skill needs of the existing workforce that must transition to new opportunities in growth industries such as advanced manufacturing, health research and information and communications technology.
A review of industrial lands data shows that one in 10 industrial jobs in Greater Sydney are in the Blacktown Local Government Area (LGA) and many of these jobs are in the construction industry55. It also revealed the concentration of goods and services supporting the health sector through the Cumberland and Canterbury-Bankstown LGAs, as well as critical freight and logistics hubs. This central productivity spine, that includes the Westmead health and education precinct, provides a strong foundation to grow a high-value economic ecosystem.
In the Western Parkland City, the City Deal and emerging Western Sydney Aerotropolis provide significant opportunity for economic growth and innovation. The Liverpool Innovation Precinct will be a hub for health, research, education and technology, which will capture opportunities in the growing health sector. Other initiatives such as re-imagining Campbelltown CBD and the Penrith Economic Development Strategy will target opportunities for growth.
The Eastern Economic Corridor includes high value economic precincts from Macquarie Park in the north through the Harbour CBD to the trade gateways at Port Botany and Sydney Airport. The Eastern Economic Corridor has been heavily impacted by the sharp decline in international students and visitors. An important part of the economic recovery in this corridor will be precincts such as Tech Central and the renewal of Circular Quay, as well as the expansion of the night-time economy.
For precincts to successfully deliver on the NSW Government's objectives for innovation, economic recovery and growth, they need to have:
- sufficient scale
- clustering of research, expertise, services and industries
- a unique value proposition or areas of specialisation.
Impacts on job sectors have been uneven. While some sectors are likely to be affected only in the short term, some may continue to be affected and others may be presented with growth opportunities. Education and training must respond to these changes to match industries with skills and people with jobs. The economics of place means successful job creating precincts and corridors benefit from agglomeration and proximity to other businesses and productivity networks. The spread of industrial lands across the cities are also an important consideration.