May 03, 2018/ News
The future of Western Sydney is looking bright. Sydney's West is on an upward trajectory, with Deloitte dubbing this region as the 'engine room of growth' for Greater Sydney and Australia as a whole. The great potential that Western Sydney holds, now and in the foreseeable future, has made it an attractive market to enter for a range of different businesses, in varying industries. It's becoming increasingly clear that Western Sydney is reaching a crucial point of its economic rise and companies are clamouring to get in at the ground floor of something special.
Western Sydney is currently the third largest economy in Australia, after Sydney CBD and Melbourne, and produces roughly 31 per cent of Sydney's Gross Regional Product ($104 billion).
The size and rapid growth of Western Sydney's economy is no accident. A number of factors have converged to create the perfect conditions for its rise, as well as the potential for further expansion in the future. These factors include, population growth, infrastructure investment, booming industries, and land capacity.
Population Growth & New CBDs
The population of Western Sydney is expected to balloon over the coming years. By 2036, the population of Sydney's West is expected to swell to 9.9 million, with over half of Sydney's population expected to take up residence west of Parramatta.
The projected increase in population will be spurred by the relatively high birth rates in Western Sydney, the search for affordable housing, and the growth in migration.
Population growth is a major contributor to the strength of Western Sydney's economy, because as the population increases (particularly migration rates), there will be higher numbers of working-aged residents able to enter the labour force. This expanded workforce is beneficial, as it can result in enhanced productivity, increased outputs, and the achievement of greater economies of scale.
Population growth and migration is an important ingredient in driving Western Sydney's economic growth, since labour participation rates tend to increase, skill gaps are more easily filled, and the efficiency of the workforce is improved.
Also, with Western Sydney's population set to explode, cities in the west are emerging as new Central Business Districts (CBDs). Key business precincts in the West include Parramatta, Penrith, Westmead, Olympic Park, and Liverpool.
For so long, Sydney CBD has been the main hub for jobs and economic activity, effectively draining Western Sydney's talent pool. Now, with the population swelling outwards, more opportunities will be available closer to home for Western Sydney residents. The continued development of CBDs in Sydney's West will promote decentralisation and ensure that job prospects in the region remain strong well into the future.
Another factor behind Western Sydney's ascension as an economic powerhouse, is the significant investment that has been made in large-scale infrastructure projects. Infrastructure, in particular transport infrastructure, enables greater connectivity to urban centres and business districts in Sydney's West, reduces traffic congestion and travel times, and enhances workplace productivity.
The most notable infrastructure projects in Sydney's West include Sydney Metro, WestConnex and the Western Sydney Airport. These large-scale infrastructure projects will encourage more people to visit, live, and/or work in the area, as well as opening it up to international investment thanks to the establishment of an airport. These crucial pieces of infrastructure are beneficial for businesses, because they help improve their visibility and accessibility to a large customer base.
In addition to this, transport infrastructure is a major driver in the Western Sydney economy, due to the large volume of jobs that these projects are able to create. The construction alone for these kinds of projects can generate thousands of jobs over several years. Many more direct and indirect jobs are also created following the completion of a project.
One industry that has benefitted from the increased investment in Western Sydney's infrastructure, is the labour hire industry. Due to the nature of large-scale infrastructure projects, labour hire tends to be the go-to recruitment solution, as specialised skills and last-minute workers are often required. Labour hire agencies have flourished due to this influx of work and is attracting more labour hire companies to the Western Sydney market. Healthy competition is a necessary element for a thriving economy, and the positive trends occurring in the labour hire industry are also taking place in other sectors, as various companies begin to recognise the benefits of operating in Western Sydney.
The entrance of more businesses, not just in the labour hire industry, but across the board, will help to sustain the strength of Western Sydney's economy.
The economy in Sydney's West is expected to remain strong in the coming years thanks to the abundance of land still available for urbanisation. These pockets of undeveloped land hold great potential in terms of what it can be converted into. Developing land for residential, industrial, or commercial purposes, creates opportunities for jobs, establishes new communities and activity hubs, and generally promotes a better quality of life for locals.
The vast tracts of untouched land that are still available for development, will help facilitate the sustained growth of Sydney's West.
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