HOST OF THE

& MAYORS’ FORUM2015APCS

brisbane economic snapshot

Lord Mayor’s

SECOND quarter 2015 - k e y f a cts

Value of the Greater Brisbane economy (June 2014)

Per capita income – Greater Brisbane (June 2014)

Population (June 2014)

^ Refers to the Brisbane City Council Local Government Area (LGA). ^^ Greater Brisbane includes all of Brisbane City Council, Logan City Council, Redland City Council, Ipswich City Council and Moreton Bay Regional Council. # The LGA employment figure is a Brisbane City Council estimate of people working in Brisbane, which includes commuters living outside of the Brisbane LGA. * Source: Brisbane City Council estimate. ** Figures sourced from Queensland Government Statistician’s Office medium series population projections by Local Government Area (2013). Source (all other): Australian Bureau of Statistics (ABS).

Population projections (June 2036)**

Employment (April 2015)

$146 billion* $64,188* 1,146,787 LGA

2,274,560 1,440,223 LGA

3,315,184 824,200 LGA

1,159,100 Greater Brisbane

Greater Brisbane

Greater Brisbane

^#

^^

lord mayor's brisbane economic snapshot - SECOND quarter 2015

B

SEVEN KEY ECONOMIC PRIORITIES

bRISbaNE Economic Snapshot This quarter, the Lord Mayor launched the Brisbane 2022 New World City Action Plan, an economic strategy which outlines the priorities and actions to deliver economic growth in Brisbane. This plan aims to highlight how the Brisbane region can collectively contribute to its success and growth by providing a competitive platform for industries. The figure opposite shows the seven key economic priorities outlined in the plan.

This quarter's snapshot focuses on Brisbane’s industry clusters and strengths as outlined in the Brisbane 2022 New World City Action Plan. Brisbane has demonstrated a diverse set of strengths from food and agribusiness to professional knowledge-based industries. The main story, ‘Brisbane’s Economic Evolution’, examines how Brisbane’s economy has changed since becoming a municipality in 1859 and provides an in-depth review of the city’s current industry strengths.

For more information on the Brisbane 2022 New World City Action Plan refer to Brisbane Marketing’s website.

lord mayor's brisbane economic snapshot - SECOND quarter 2015

1859 Municipality of Brisbane proclaimed1

1864In Brisbane, Queensland’s first commercial production of sugar occurs1

Construction begins on the first Queensland railway line1

1870 Sugar becomes an export industry2

1883 Brisbane stock exchange opens1

1884 Brisbane ships frozen meat to London for the first time1

1888 Electricity is supplied to the Brisbane General Post Office (GPO)2

1890Interstate exports continue to exceed foreign exports in value terms1

Pastoral products still the key export but mining commodities are on the rise1

1898 Opening of the wool sales in Brisbane3

1902 Brisbane proclaimed as a city1

1910 The first university in Queensland, The University of Queensland (UQ), is officially founded5

1911 Brisbane has a population of 69,9684

Teaching starts at UQ with 83 students5

1924Brisbane to Cairns railway line is completed1

City of Brisbane Act passed, amalgamating local authorities to create the current Brisbane Local Government Area6

1925 A 32 hectare site at Eagle Farm chosen as aerodrome7

1946 Eagle Farm Aerodrome re-opened as Brisbane Airport8

1954 Population of metropolitan Brisbane is 502,3209

1955 Queensland’s first motor car body manufacturing industry established in Brisbane1

1962 Bruce Highway from Brisbane to Cairns is completed1

1966 Japan replaces the United Kingdom as Queensland’s major trading partner in port trade10

1969 Port of Brisbane’s first container terminal is built1

1970s First commercial jumbo jets arrive through Brisbane Airport11

1980 In value terms, sugar is the largest single contributor to Queensland’s foreign exports1

1985 Brisbane establishes its first sister city relationship with Kobe (Japan)12

1988 World Expo ‘88 held in Brisbane1

1990 Coal is the largest single foreign export item in value terms for Queensland1

1991 1,334,098 people lived in the Brisbane Statistical Division and 575,148 were employed

1993 Construction on the Brisbane Convention and Exhibition Centre begins13

1999 Australia TradeCoast is established14

bRISbaNE'S ECONOMY THROUGH THE YEaRS

Image, above right: Edward and Turbot streets, Brisbane, 1925

lord mayor's brisbane economic snapshot - SECOND quarter 2015

2001Brisbane’s economy reaches $81.6 billion15

International students account for 13% of those studying in Brisbane16

2008 Asian and European Union markets are the main Queensland export markets1

2011 More residents working in health care and social assistance than any other industry

2012Brisbane leads the country as the largest exporter of chilled and frozen beef17

Port of Brisbane handles 13.6% of Australia’s container trade

2013 International students account for 20% of those studying in Brisbane16

2014

In 2013-14, the Greater Brisbane economy reaches $146 billion15

Greater Brisbane has an estimated resident population of 2,274,560 and employment of 1,141,60018

Tourism exports reach $5 billion19

bRISbaNE'S Economic EvolutionIn 1859, Brisbane was proclaimed as a municipality and soon began to take on the role of Queensland’s commercial centre. Acting as Queensland’s administrative, educational and economic centre, Brisbane continued to grow and in the 1880s, saw a period of rapid expansion with the population of Brisbane city almost trebling in a decade. The 1880s also saw a dramatic expansion of the food sector in Brisbane, with rapid development in meat exporting. As a result, by 1901 there were several major meatworks in Brisbane20.

By the 1960s Queensland began to transition from its pastoral origins into primary products. By 1980, sugar was the largest individual contributor to Queensland’s foreign exports. By 1990, coal took over as Queensland’s largest single foreign export commodity (by value).

More recently, Brisbane has been transitioning its economic foundations from primary products and non-tradable population-serving sectors, to knowledge-based industries and traded sectors. These knowledge-based industries and traded sectors integrate Brisbane with the global economy and have seen employment growth in the city exceed population growth in recent years. This has delivered an increase in household income, due to an increased proportion of higher-skilled and higher-value jobs.

A key driver of productivity and competitiveness in advanced economies is the potential for industries to cluster. When industries and research institutions concentrate together, they share knowledge and skills, innovate and form stronger supply chains that can compete in global markets21.

Industry clusters have recently been examined at a national level through the Australian Industry Report22, which identified five industry cluster strengths for Australia: Advanced Manufacturing, Food and Agribusiness, Medical Technologies and Pharmaceuticals, Mining Equipment, Technology and Services, and Oil, Gas and Energy Resources. Research shows that Brisbane has strengths in some of these industry clusters.

lord mayor's brisbane economic snapshot - SECOND quarter 2015

Advanced Manufacturing

Due to the rise in low-cost manufacturing in emerging economies, most advanced economies have seen a decline in manufacturing industry employment as businesses move up the value chain to more technology-intensive operations. Advanced Manufacturing is an important contributor to the economy through its extensive purchases of other goods and services, higher wages and higher-skilled employment, and capacity to create products which can be exported over large distances. Advanced niche manufacturing activities offer export opportunities that are resilient to global competition from lower-wage economies. In Brisbane, Aircraft Manufacturing and Repair and Mining and Construction Equipment are more concentrated than in other Australian capital cities.

Food and Agribusiness

By 2025, the global demand for food is expected to rise by 35% (from 2007 levels)23. Most demand is expected to come from Asia, a major export region for Brisbane. Of Australia’s capital cities, Brisbane had the third-highest employment and the highest average annual growth rate in employment (3.5%) over a five year period between 2006 and 2011. For Brisbane, growth in this sector is primarily driven by Meat and Meat Product Manufacturing and Bakery Product Manufacturing, mirroring what is happening across Australia.

In 1884, Brisbane shipped frozen meat to London for the first time. Today, Brisbane leads the country as the largest exporter of chilled and frozen beef. Meat exports through the Port of Brisbane reached a new record in 2012, accounting for 71% of Australia’s entire beef trade export24. In May, representatives from Chinese agribusiness companies visited Queensland for the national beef exhibition. China is Australia’s largest agricultural goods market and by 2050, almost half of global food growth is expected to be driven by China25.

bRISbaNE's ECONOMIC EVOLUTION INDUSTRY CLUSTERS Medical Technologies and Pharmaceuticals

As a knowledge-intensive industry, Medical Technologies and Pharmaceuticals requires a high level of innovation and skill. Within this sector, Australia exported approximately $1.7 billion of medical devices to 167 countries worldwide in 2013-14. Of the five sectors listed in the Australian Industry Report22, Medical Technologies and Pharmaceuticals has the highest projected growth rate. Brisbane has steady average annual growth in employment at 2.1% in this cluster.

Mining Equipment and Technical Services

Mining Equipment and Technical Services comprises firms that provide specialised services and support to the mining and mineral processing industry. High diversity in both size and activity is required among businesses within this industry cluster. Brisbane is just behind Perth as the fastest-growing capital city in this sector. Brisbane has strong employment in Engineering Design and Engineering Consulting Services, which account for almost half the employment in this industry cluster.

Queensland is a global leader in mining technology. Sixty per cent of all mining software used throughout the world is developed in Australia and the world’s leading mining software company, Ventyx (previously Mincom), has a major presence in Brisbane26.

Oil, Gas and Energy Resources

Known for its relatively high export propensity, the Oil, Gas and Energy Resources cluster generates very high returns on investment compared to other key industry clusters. It also has a high capital purchase-to-sales ratio, making it vulnerable to interest rate changes. In Australia, this cluster is dominated by Brisbane and Perth. From 2006-11, Brisbane showed the strongest employment growth in this cluster (20.2%), almost twice the rate of Perth (11.3%). While both cities do very well in this cluster, they each have different specialisations. Brisbane specialises in Coal Mining, while Perth is primarily focused on Oil and Gas Extraction.

Brisbane’s employment in Oil, Gas and Energy Resources continued to grow from 2011-14, to have the second-highest employment growth among key industry clusters, behind Knowledge-Based Services27.

lord mayor's brisbane economic snapshot - SECOND quarter 2015

1. Food and Agribusiness

2. Advanced Manufacturing

3. Energy and Resources

4. Knowledge-Based and Corporate Services

5. Higher and International Education

6. Accommodation and Visitor Economy

7. Creative and Digital

8. Property Development and Construction

Employment in the Brisbane has grown by 2.9%*

As Brisbane strengthens its high-value exporting sectors, it is expected that employment growth will be strongest in highly skilled occupations. The Brisbane 2022 New World City Action Plan outlines seven key economic priorities for the city, and identifies the below key traded industry clusters.

bRISbaNE 2022 NEw wORLD CITY aCTION PLaN

Food and Agribusiness

Energy and Resources

Healthcare Services

Advanced Manufacturing

Medical Technologies and Pharmaceutical

Mining Equipment and Technology

Creative and Digital

Accommodation and

Visitor Economy

Knowledge-Based and Corporate Services

2.50

2.00

1.50

0.50

0.00

1.00-5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

Average Annual Employment Growth Rate (2006-11)

Brisbane Cluster Summary

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brisbane Cluster Summary

lord mayor's brisbane economic snapshot - SECOND quarter 2015

bRISbaNE INDUSTRY STRENGTHS

Knowledge-Based AND CORPORATE Services

This includes Scientific Research Services, Architectural Services, Legal and Accounting Services.

Knowledge-Based and Corporate Services is one of Brisbane’s largest and fastest-growing industry clusters. Highest employment in this sector is in Legal and Accounting Services (22,688). From 2006-11, the strongest growth was in Corporate Head Office Management Services which almost tripled, despite being the industry with the lowest employment (approximately 1200 people). Knowledge-Based and Corporate Services will be increasingly important to Brisbane. ABS data shows that from 2011-14 the Knowledge-Based and Corporate Services industry cluster continued to grow strongly28.

Accommodation and Visitor Economy

This includes Cafes and Restaurants, Accommodation, Clubs, Travel Agencies and Tour Arrangement Services.

Not surprisingly, Sydney is Australia’s largest and most specialised capital city in hospitality, with Melbourne and Brisbane coming in second and third place respectively. Brisbane continues to show growth in its tourism markets. In 2011, tourism-related industries accounted for 13.6% of employment and 6% of Gross Regional Product (GRP) in the Greater Brisbane area.

As proof of Brisbane’s continued growth in this cluster, the city saw positive annual growth in both domestic and international overnight visitors for the year ended September 2014. Domestic visitors grew 3.8% from the previous year, with visiting friends and relatives the main driving force. International visitors grew in almost all categories, increasing by 2.3% overall29.

HIGHER and International Education

This includes Higher Education, Technical and Vocational Education and Training.

Higher and International Education is a pure export industry cluster. It is the largest single services export in Brisbane and contributed approximately $3.8 billion to the local economy in 2014. This cluster forms a key part of Brisbane’s competitive platform, through skills, research and global connections.

Brisbane continues to stand out as a location for education. In the latest QS ranking, Brisbane was the 23rd best student city in the world and had one of the highest student ratios of any city30. Brisbane ranked highly as a destination, offering a mix of urban and outdoor lifestyles, as reflected in the high scores it received for the student mix and desirability categories. Of Brisbane’s universities, UQ ranked 43rd in the World University Rankings in 2014. UQ has 19 subject areas ranked in the top 50 of the world’s universities31. When compared to other Australian capital cities, Brisbane shows the strongest growth in higher education.

In addition to the immediate benefits, many of the clusters listed above are knowledge-based and require a highly educated population. This ensures education will be a pillar of our future growth and a strong contributor to productivity within the economy.

Creative and Digital

This includes Radio/Television Broadcasting, Publishing, Performing Arts Venue Operation and Computer System Design.

Creative industries generate a significant revenue stream that is forecast to grow rapidly over time. This cluster is a platform for innovation within an economy. Brisbane is growing digital businesses and digital infrastructure to assist start-ups to start small and grow big, exporting to global markets. Brisbane is also home to Australia’s first Creative Industries Precinct.

The largest sub-sector in Brisbane’s Creative and Digital industry cluster is Computer Design and Related Services. Although average annual growth in Computer Design and Related Services is comparable across Australia's capital cities, Brisbane has a marginally higher average annual growth rate of 6.7%. It is also the industry with the highest employment within this cluster with more than 15,000 people.

Wotif was launched in 2000 by Graeme Wood, an economics graduate from UQ. Wotif grew to be Australia’s most prominent travel booking website and was sold to Expedia in July 2014 for $703 million. This is an example of the many successful companies that Brisbane has launched in the Creative and Digital industry cluster.

Visit www.choosebrisbane.com.au/2022plan to access the Brisbane 2022 New World City Action Plan.

Brisbane City Council Information GPO Box 1434

Brisbane Qld 4001

For more information visit www.brisbane.qld.gov.au or call (07) 3403 8888

Facebook.com/BrisbaneCityCouncil

@brisbanecityqld CA14-585776-06-993© Brisbane City Council 2015

1 Australian Bureau of Statistics, Qld Stats, Mar 2009, cat. no. 1318.3, viewed 6 May 2015, http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1318.3Feature%20Article14Mar%202009

2 R Lawson, Brisbane in the 1890s, University of Queensland Press, St Lucia, 1973.3 R Lawson, Brisbane in the 1890s, University of Queensland Press, St Lucia, 1973. 4 This is the sum of the Brisbane North and Brisbane South Census Districts from the 1911

Census. Please note that at the time of the 1911 Census, Indigenous persons were not recorded.

5 The University of Queensland, About UQ – History of UQ, viewed 4 May 2015, http://www.uq.edu.au/about/history-of-uq6 Brisbane City Council, Council history, Brisbane City Council, Brisbane, 2014, viewed

5 May 2015, http://www.brisbane.qld.gov.au/about-council/council-information-rates/council-history

7 Brisbane Airport Corporation, Airport History, viewed 18 May 2015, http://www.bne.com.au/corporate/about-us/our-company/airport-history 8 Brisbane Airport Corporation, Airport History, viewed 18 May 2015, http://www.bne.com.au/corporate/about-us/our-company/airport-history9 Uses the Brisbane Metropolitan figure as defined in the 1954 Census. 10 Queensland Government, Queensland Past and Present: 100 years of Statistics, 1896-

1996, Queensland Government – Statistician’s Office, Brisbane, 1998, pp. 125-167. 11 Brisbane Airport Corporation, Airport History, viewed 18 May 2015, http://www.bne.com.au/corporate/about-us/our-company/airport-history12 Brisbane City Council, List of Sister Cities, Brisbane City Council, Brisbane, 2014,

viewed 7 May 2015, http://www.brisbane.qld.gov.au/about-council/governance-strategy/economic-development/international-relations-program/list-sister-cities

13 Wikipedia, Brisbane Convention and Exhibition Centre, Wikipedia, The Free Encyclopedia, 2015, viewed 18 May 2015, https://en.wikipedia.org/w/index.php?title=Brisbane_Convention_%26_Exhibition_Centre&oldid=663879670

14 Australia TradeCoast, ATC History, Australia TradeCoast, 2015, viewed 18 May 2015, http://www.australiatradecoast.com.au/the-region/atc-history/ 15 Brisbane City Council estimate. 16 Australian Government, Enrolment Count by Citizenship Category – uCube, Australian

Government – Department of Education and Training, viewed 6 May 2015, http://highereducationstatistics.education.gov.au/ 17 J Condon, ‘Port of Brisbane notches up record year for beef exports’, Beef Central,

28 February 2013, viewed 7 May 2015, http://www.beefcentral.com/trade/port-of-brisbane-notches-up-record-year-for-beef-exports/

REFERENCES18 Australian Bureau of Statistics, Labour Force, Australia, Detailed – Electronic Delivery,

Apr 2014, cat. no. 6291.0.55.001, viewed 7 May 2015, http://www.abs.gov.au/ausstats/abs@.nsf/mf/6291.0.55.001 19 Tourism and Events Queensland, Brisbane Regional Snapshot Year Ending September

2014, viewed 5 May 2015, http://teq.queensland.com/~/media/97EDA41336344C8BB788B9FB9AC4F144.ashx 20 R Lawson, Brisbane in the 1890s, University of Queensland Press, St Lucia, 1973. 21 Brisbane Marketing, Brisbane 2022 New World City Action Plan, Brisbane Marketing,

Brisbane, 2015, viewed 26 May 2015, http://www.choosebrisbane.com.au/2022plan 22 Office of the Chief Economist, Australian Industry Report 2014, Australian

Government – Department of Industry, viewed 6 May 2015, http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/Australian-Industry-Report.pdf

23 Office of the Chief Economist, Australian Industry Report 2014, Australian Government – Department of Industry, viewed 6 May 2015, http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/Australian-Industry-Report.pdf

24 J Condon, ‘Port of Brisbane notches up record year for beef exports’, Beef Central, 28 February 2013, viewed 7 May 2015, http://www.beefcentral.com/trade/port-of-brisbane-notches-up-record-year-for-beef-exports/

25 Farm Weekly, Beef industry set to welcome China, Farm Weekly, viewed 6 May 2015, http://www.farmweekly.com.au/news/agriculture/cattle/beef/beef-industry-set-to-

welcome-china/2730809.aspx 26 L Tedesco and C Haseltine, An economic survey of companies in the Australian mining

technology services and equipment sector, 2006-07 to 2008-09, ABARE-BRS research report 10.07, Canberra, 2010.

27 Unpublished ABS Data. 28 Unpublished ABS Data. 29 Tourism and Events Queensland, Brisbane Regional Snapshot Year Ending September

2014, viewed 5 May 2015, http://teq.queensland.com/~/media/97EDA41336344C8BB788B9FB9AC4F144.ashx 30 QS Top Universities, Brisbane – QS Best Student Cities ranking: 23rd, viewed 5 May

2015, http://www.topuniversities.com/university-rankings-articles/qs-best-student-cities/brisbane

31 QS Top Universities, University Rankings, viewed 6 May 2015, http://www.topuniversities.com/university-rankings