South Australian Economy – Doing OK, but Could Do Better
The South Australian (SA) economy has confounded the critics. The unemployment rate reduced to 5.9% at the end of 2017, having been quite a bit higher at 7.3% earlier in the year. On the face of it, that’s a good result, given the closure of the Holden factory in October 2017.
At EGM we have seen a strong start to the year. Sectors where we are seeing strong activity include: Infrastructure, Energy and Resources, Manufacturing and Not For Profit (Profit For Purpose).
Reading through the batch of economic reports that have been released in January, they paint a mixed picture.
For example, the CommSec ‘State of States’ survey shows SA slipping one place from 4th to 5th out of the 8 states based on a basket of economic indicators. The main reason is a resurgent Tasmania rather than a slowdown in SA.
The CommSec survey is interesting - it compares state performance against the 10-year average for a range of indicators. SA is doing better now than its 10-year average in economic growth, unemployment rate, construction work and housing finance. It’s doing worse than the 10-year average for population growth and new business investment.
And there’s the nub of the problem.
Apart from the Northern Territory, SA has the slowest rate of population growth in the country (less than half of Australia in total).
With zero growth and ageing of the population, SA has big problems in this area. Between 1981 and 2016, for example, SA’s population grew by 382,000 – simply not enough to fuel economic growth. The poor figures are due to low levels of immigration and high interstate and overseas migration.
As for Business investment, a report from the University of Adelaide sums the problem up (‘Developing Strategy for Reinventing South Australia’ January 2018):
‘SA has borne a higher adjustment than other states because it had more state protected industries. It has therefore had to make more of an adjustment and in a short time.’
Heavily subsisted car and defence industries need to be replaced by private sector businesses, start-ups and companies able to take advantage of the digital revolution. Agriculture and mining simply cannot fill the void.
Government clearly has a role to play, however there have been criticisms:
‘People in regional and rural economies have long believed they have been neglected; in SA the consistent criticism of government is that it is city-centric. It is just as true for individuals, regions and businesses that if you want people to be self-reliant and accountable then they have to be given the responsibility to do so and this means that decision-making power and responsibility needs to be shifted down.’ (University of Adelaide).
At EGM we are taking these things seriously.
As recently announced, we are partnering with Train Me 4 Work (TM4W) on an Indigenous programs initiative to help organisations boost under-represented groups and push diversity. The programmes are designed in consultation with the indigenous community to ensure the training meets their specific needs.
The trainers at Train Me 4 Work have an understanding and empathy towards to barriers to employment the indigenous community faces after being trained by someone with first-hand experience.
The recruiters at EGM understand the needs and requirements of their clients and assist in interview preparation as part of the screening process.
With a long history of working with a number of large employers to ensure their Indigenous Employment Programs are successful and the participants not only gain but maintain sustainable employment, Train Me 4 Work has the experience to ensure their programs are a success.
EGM's initiatives to push women, Indigenous and other underrepresented groups mean that the partnership delivers the best outcomes for all parties.
For more details see https://www.egmpartners.com.au/indigenous-employment
We look forward to playing our part in the future success of our state.