Economies of Cities and Regions: Parramatta - Case Study Example

Economies of Cities and Regions: Parramatta Name Instructor Executive Summary Parramatta is a city located in the western part of Sydney. It is known for its nice parks and historic sites. With a population close to 200,000, Parramatta is home to a workforce of more than half of that population. It is a bustling, highly urbanised multicultural area populated mostly by professionals with Bachelor’s degree and higher. Parramatta’s economic growth has been consistent since the early 2000. This is evident from its Gross Regional Product that has been on the upswing since then and has weathered even the 2007 global recession that made many economies all over the world bleak for many years. In several instances, it has surpassed its home state NSW in GRP growth and has contributed significantly to the state’s overall growth. A look at other economic indicators validated this observation as they point to trends that indicate a positive outlook for this more than 6,000-hectare city. Nonetheless, there are minor setbacks for this city, such as the slight increase in business exits in the last couple of years, as well as a comparatively high unemployment rate that surpasses that of Sydney. Introduction Parramatta, which is an Aboriginal word that means ‘the place where eels lie down;’ is about 24 kilometres away from the Sydney General Post Office among the western suburbs of the NSW capital. It has a total land area of 6,138 hectares and a multicultural population of 184,622 as of the 2013 Australian Bureau of Statistics Estimated Residence Population or ERS (Community Profile 2014). Parramatta is known for its elegant parks and historic sites. The Old Government House built in 1799, and the Hambledon Cottage in the Elizabeth Farm Estate, which was home to the country’s first pastoralists John and Elizabeth Macarthur, can be found in Parramatta (Sydney.com 2014). This report focuses on the economy of Parramatta, delving into various economic indicators to see economic trends and realities of this NSW city, such as Gross Regional Product and presence of industries. Tables are used as graphical illustrations of figures and statistics. Literature Review The Gross Regional Product (GRP hereafter) of Parramatta was 16.42 billion as of 2013, according to the National Institute of Economic and Industry Research or NIEIR (cited Profile.id 2014). This constituted 3.57% of NSW’s GRP. GRP is defined as the “measure of the economic output of a state or province … [and] the sum value added by industries within the state [or region] (Cram 101 2012). It is a region’s version of the GDP. Table 1 shows the GRP of Parramatta from 2001 to 2013, as well as that of the NSW. As of 2012, Parramatta had a total number of 16,555 businesses, slightly higher than the number in 2011, which were 16,337. The number of non-employing businesses was the highest at 10,076, followed by businesses employing 1 to 4 persons. Businesses employing more than 4 Table 1 GRP, 2001-2013 (Profile.id 2014) have the least number at 2,065. The total number of business entries had slightly decreased since 2010. It is only businesses that employ 1 to 4 persons that have increased from 898 in 2011 to 968 in 2012. On the other hand, the total business exits declined although business exits in businesses employing more than 4 persons have slightly gone up by 29 in 2012. Total business exits was 2,730 compared to 2011, which had 2,763. The business exit figures for other years were: 2,823 in 2008, 2,796 in 2009, and 2,423 in 2010 (ABS 2014). Itemising businesses by industry shows that the top four in terms of the number of businesses established are professional scientific and technical services, rental, hiring and real estate services, retail trade, and financial and insurance services. These figures are based on the 2012 census. However, the Health Care & Social Assistance industry is the biggest employer, followed by retail trade, manufacturing, and professional scientific and technical services (ABS 2014). The complete list can be found in Table 2. With respect to exports, manufacturing is the city’s biggest exporter at 5.9 billion, followed by Finance and Insurance Services at $2.9 billion, and Public Administration at $1.6 billion (Economic Profile 2014). Table 2 Employment by Industry (ABS 2014) According to the ABS, Parramatta has a total population of 178,549, as of the 2012 census. However, the ABS in its 2013 Estimated Residence Population or ERS of Parramatta cited its population as 184,622. Its total work force is 91,611 as of 2011, which are up by 2,771 from the 2006 figure of 88,840. Sixty point two percent of the population has post school qualifications. Its top three occupations are professionals, clerical and administrative workers and managers, and the qualifications of the largest number of workers are Bachelor’s degree or higher. Majority of its workers earn between $600-1249, but the number of those earning above $1200 do not lag behind. Table 1 graphically show these statistics and compare it to 2006 figures using NSW statistics as benchmark (Profile.id 2014). Methodology This report used the quantitative approach using the data collated by the Australian Bureau of Census. The websites of Profile.id, which cited the data used by the National Institute of Economic and Industry Research or NIEIR, also contained a lot of summarised statistics that helped the research a lot. Tables and graphs were used to illustrate the figures better. Table 3 Parramatta Labour Force (Profile.id 2014) Results Parramatta has a thriving economy and based on current trends for the last several years, its economic outlook is good. However, it has a comparatively high unemployment rate. Discussion and Conclusions As can be seen from trends in its GRP, Parramatta had a consistent GRP growth at times surpassing its home state NSW. Its biggest growth occurred in 2008, which was the time when the 2007 global economic recession sparked by the credit crunch that followed the collapse of the housing bubble in the US. Although its growth was lesser the following year, there was still a significant growth of GRP at +1.7%. This signified the flexibility of Parramatta’s economy and its ability to withstand economic difficulties. Recommendations Although Parramatta’s economic outlook is positive for a number of reasons, particularly a consistently growing GRP, there are also indicators that need to be improved to ensure that the positive outlook remains unchanged. The Council should look into the reasons of the increasing business exits of employment-generating businesses – or those that employ more than 4 persons – are increasing. This is important because right now the Parramatta unemployment rate stands at 7%., which is higher than that of Sydney’s 5%, according to 2011 census (cited Profile.id). Perhaps, business and tax incentives could be offered to keep these businesses from closing and, thus, boost the employment rate of Parramatta. References Cram 101 2012, e-Study Guide for: Companion To Urban Economics C by Arnott, Cram101 Textbook Reviews. Community Profile 2014, ‘Parramatta,’ Profile.id, viewed 15 October 2014, http://profile.id.com.au/parramatta?WebID=340 Economic Profile 2014, Parramatta, viewed 17 October 2014, http://www.economicprofile.com.au/parramatta/economy/regional-exports Sydney.com 2014, Parramatta, viewed 17 October 2014, http://www.sydney.com/destinations/sydney/sydney-west/parramatta Read More