Economy of Victoria (state)

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Economy of Victoria
Melbourne CBD area
CurrencyAustralian dollar (A$ or AUD)
1 July – 30 June[1]
Statistics
GDPIncreaseA$515.2 billion (2022)[2]
GDP growth
Positive decrease2.6% (2022/23)[3]
GDP per capita
IncreaseA$76,357 (2021/22)[3]
0.948 (2021) very high[4]
UnemploymentPositive decrease 3.7% (2022/23)[3]
Main industries
Financial services, professional-technical services]], healthcare, education, construction[5]
External
ExportsA$61.8 billion (2022/23)[3]
Export goods
wheat, meat, Pharm products, beef, wool, dairy product[3]
Main export partners
 China 17.2%
 United States 12.5%
 New Zealand 8.1%
 Japan 7.2%
 South Korea 4.6%[3]
ImportsA$146.2 billion (2022/23)[3]
Import goods
Passenger and Goods motor vehicles, Refined and Crude petroleum, Pharm products[3]
Main import partners
 China 27.2%
 United States 10.6%
 Germany 4.8%
 Thailand 4.6%
 Japan 4.5%
Public finances
A$116.7 billion (2022/23)[6]
RevenuesA$89.3 billion (2022/23)[6]
ExpensesA$93.3 billion (2022/23)[6]

All values, unless otherwise stated, are in US dollars.

The state of Victoria is the second-largest economy in Australia after New South Wales, accounting for 23.24% of the nation's gross domestic product, valued at A$515.2 billion in 2022.[5] The economy is primarily built upon financial services, agriculture, healthcare and social assistance, tourism and construction. Victoria's main exports are agricultural and pharmaceutical products, while the largest employer in the state is the healthcare and social assistance sector.[3]

Economic history

Aboriginal Australians in Victoria primarily lived within a hunter-gatherer economic system with the effective adoption of the fire-stick farming method.[7] In the early days of the 1820s, the pioneer European colonists arriving from the sea kept pushing the exploration boundary further inland to search for fertile grazing land.[8]

A boom period in the 1870s due to the discovery of gold led to the construction of many grand edifices and public buildings such as Melbourne's Federal Coffee Palace

In 1851, gold was first discovered at Warrandyte which is 26km (16 miles) from Melbourne, leading to rushes.[9] By the end of 1851, half the population of the colony were working on the goldfields and new immigrants from Britain and China were flowing in rapidly. By 1860, the total population had reached 500,000 and constituted nearly half of the entire Australian colony population.[10] Although true opportunities greatly contracted, Victoria was still reputed for its economic opportunism and individualism which further encourages material progress and financial speculation.[11] However, the speculation was halted in the early 1890s with the collapse of financial institutions and plummets in export prices.[12]

In the 20th century the Victorian economy was marked by slow growth with turbulence from time to time.[13] Finance and manufacturing industries continue to grow as the traditionally pillar sectors of Victoria's economy, while other industries such as pharmaceutics, retail, oil refining were also growing.[14] Large-scale state investment in infrastructure and high-tech industries were inconsistent due to political factors, while there had been a huge governmental debt accumulated over time.[15] Victoria had also tried to structurally transform its economy by developing new industries such as tourism and other cultural industries, which had seen great progress.[16]

Change of Gross State Product (GSP) from 1990 to 2021

Labour market

In 2023 around 3.6 million people are employed in Victoria, increasing by 754,800 from the past decade.[17] Over the decade, the labour participation rate increased by 2.8 points (from 64.8% to 67.6%), while the unemployment rate declined by 1.9 points (from 5.6% to 3.7%).[18] Currently, 69.0% of Victorian workers are engaged in full-time work, an increase of 2.0% since 2019.[19]

As of 2021 Healthcare and social assistance sector is the largest employer, with 14.1% of workforce in the industry, followed by construction (9.4%) and retail (9.4%).[20]

Sectors

Agriculture

Victoria is Australia's second-largest agricultural producer in gross value of production, representing about 25 percent of Australia's total food production.[21] There are 67,600 people employed in the agricultural industry, making it the 6th largest employer in the state.[20] There are about 21,600 farms in the state, managing more than 11.4 million hectares or 50% of the state's total landmass, of which 40% was used for cropping and 50% for grazing.[22] Victorian farms produce nearly 90% of Australian pears and a third of apples. The main vegetable crops include asparagus, broccoli, carrots, potatoes, and tomatoes.[23]

More than 14 million sheep and 5 million lambs graze over 10% of Victorian farms, mostly in the state's north and west.[24] In 2004, nearly 10 million lambs and sheep were slaughtered for local consumption and export. Victoria also exports live sheep to the Middle East for meat and to the rest of the world for breeding.[25] More than 108,000 metric tons (119,000 short tons) of wool clip was also produced—one-fifth of the Australian total.121,200 metric tons (133,600 short tons) of pears and 270,000 metric tons (300,000 short tons) of tomatoes were produced. Fisheries and aquaculture make up for 14% of the agricultural production value.[26]

Construction

Construction in Victoria is one of the fastest growing industry especially since the COVID-19 pandemic.[27] The industry grew 4.1% in 2022 driven by high levels of public investments, which relatively offset the inadequacy in residential construction arising from material and labour shortage.[28] There were 127,370 registered companies in the Victoria construction industry by 2022, making it the largest industry by the number of registered firms.[29]

Financial services

Financial services is the largest industry in Victoria, accounting for A$49.3 billion in Gross Value Add, representing 11 percent of Victoria's Gross State Product and employing approximately 130,000 people in 2020.[30] Melbourne is one of the most famous financial hubs in the world.[31]

Tourism

Victoria has a vibrant tourism industry, contributing an estimate of A$31.5 billion to the Gross State Product while creating more than 501,400 jobs in 2021.[32] More than 83.1 million tourists visit Victoria in 2022, back to 83% of the pre-pandemic result (year ending December 2019).[33] Victoria is the second most visited destination in the country[34] and Melbourne is one of the most liveable cities worldwide.[35] The state government has also committed to invest A$633 million into the visitor economy in the Visitor Economy Recovery Reform Plan (VERRP) to boost the industry and reach the goal of A$35 billion in annual visitor expenditure and 300,000 jobs creation by June 2024.[36]

Further reading

  • Simon Ville, Glenn Withers, The Cambridge Economic History of Australia (Cambridge University Press & Assessment, 2014)

References

  1. ^ Arndt, H. W. (1963). "The Financial Year". The Australian Quarterly. 35 (2): 51–56. doi:10.2307/20633872. ISSN 0005-0091. JSTOR 20633872. Retrieved 1 December 2023.
  2. ^ "Australia GDP: Victoria | Economic Indicators | CEIC". www.ceicdata.com. Retrieved 1 December 2023.
  3. ^ a b c d e f g h i "Victoria economic fact sheet" (PDF). Economic factsheets. Australian Department of Foreign Affairs and Trade. Retrieved 1 December 2023.
  4. ^ "Sub-national HDI – Area Database – Global Data Lab". hdi.globaldatalab.org.
  5. ^ a b "Australian National Accounts: State Accounts, 2021–22 financial year | Australian Bureau of Statistics". www.abs.gov.au. 18 November 2022. Retrieved 1 December 2023.
  6. ^ a b c "2023–24 State Budget – Statement of Finances" (PDF). Victoria State Government Treasury and Finance. Retrieved 1 December 2023.
  7. ^ Bliege Bird, R.; Bird, D. W.; Codding, B. F.; Parker, C. H.; Jones, J. H. (30 September 2008). "The "fire stick farming" hypothesis: Australian Aboriginal foraging strategies, biodiversity, and anthropogenic fire mosaics". Proceedings of the National Academy of Sciences. 105 (39): 14796–14801. doi:10.1073/pnas.0804757105. ISSN 0027-8424. PMC 2567447.
  8. ^ Edmonds, Penelope (2010). "Unpacking Settler Colonialism's Urban Strategies: Indigenous Peoples in Victoria, British Columbia, and the Transition to a Settler-Colonial City". Urban History Review / Revue d'histoire urbaine. 38 (2): 4–20. ISSN 0703-0428. JSTOR 43560270. Retrieved 1 December 2023.
  9. ^ Boucher, Leigh; Russell, Lynette (2015). Settler Colonial Governance in Nineteenth-Century Victoria. ANU Press. ISBN 978-1-925022-34-6. JSTOR j.ctt1657v4w. Retrieved 1 December 2023.
  10. ^ Reed, Lawrence W. (21 July 2021). "Why Australia's Gold Rush Ushered in Political Freedom (as Well as Wealth) | Lawrence W. Reed". fee.org. Retrieved 1 December 2023.
  11. ^ Schedvin, C. B. (1979). "Midas and the Merino: A Perspective on Australian Economic Historiography". The Economic History Review. 32 (4): 542–556. doi:10.2307/2595068. ISSN 0013-0117. JSTOR 2595068. Retrieved 1 December 2023.
  12. ^ SELTZER, ANDREW; SHANAHAN, MARTIN. "The Rise and Fall and Rise (?) of Economic History in Australia" (PDF). Australian National University. Retrieved 1 December 2023.
  13. ^ Connolly, Ellis; Lewis, Christine (2010). "Structural Change in the Australian Economy | Bulletin – September 2010". Bulletin (September). Retrieved 1 December 2023.
  14. ^ Millmow, Alex (2005). "Australian economics in the twentieth century". Cambridge Journal of Economics. 29 (6): 1011–1026. ISSN 0309-166X. JSTOR 23601611. Retrieved 1 December 2023.
  15. ^ Berger-Thomson, Laura; Breusch, John. "Australia's experience with economic reform" (PDF). Australian Treatury. Retrieved 1 December 2023.
  16. ^ Ferguson, Victor A.; Lim, Darren J.; Herscovitch, Benjamin (3 September 2023). "Between market and state: the evolution of Australia's economic statecraft". The Pacific Review. 36 (5): 1148–1180. doi:10.1080/09512748.2023.2200026. ISSN 0951-2748. Retrieved 1 December 2023.
  17. ^ "Victoria's Economy Continues To Grow, Powering Jobs". Mirage News. Retrieved 1 December 2023.
  18. ^ Pandey, Swati; Burgess, Matthew (19 October 2023). "Australian Unemployment Unexpectedly Falls to 3.6% in September". Bloomberg. Bloomberg.com. Retrieved 1 December 2023.
  19. ^ "Job Vacancies, Australia, August 2023 | Australian Bureau of Statistics". www.abs.gov.au. 28 September 2023. Retrieved 1 December 2023.
  20. ^ a b "Industry sector of employment | Australia | Community profile". profile.id.com.au. Retrieved 1 December 2023.
  21. ^ Day, Lesley M. (1 January 1999). "Farm work related fatalities among adults in Victoria, Australia: The human cost of agriculture". Accident Analysis & Prevention. 31 (1): 153–159. doi:10.1016/S0001-4575(98)00057-8. ISSN 0001-4575. Retrieved 1 December 2023.
  22. ^ Department of Jobs, Precincts and Regions (28 September 2023). "Victoria's agriculture and food industries – Agriculture". Agriculture Victoria. Retrieved 1 December 2023.
  23. ^ Murphy, Maureen; Carey, Rachel; Alexandra, Leila (2023). "Building the resilience of agri-food systems to compounding shocks and stresses: A case study from Melbourne, Australia". Frontiers in Sustainable Food Systems. 7. doi:10.3389/fsufs.2023.1130978. ISSN 2571-581X.
  24. ^ Rankin, Don; Shi, Lisa. "harvesting growth for victoria". Victorian Chamber of Commerce and Industry. Retrieved 1 December 2023.
  25. ^ Lenzen, Manfred (September 2009). "Understanding virtual water flows: A multiregion input‐output case study of Victoria". Water Resources Research. 45 (9). doi:10.1029/2008WR007649. ISSN 0043-1397. Retrieved 1 December 2023.
  26. ^ "Valuing Victoria's Wild-Catch Fishing and Aquaculture Industries: measuring the economic and social contributions" (PDF). University of Technology Sydney. Retrieved 1 December 2023.
  27. ^ "Victoria's Construction Sector Key to Boosting National Productivity". Mirage News. Retrieved 1 December 2023.
  28. ^ "Victoria's building industry remains strong". Victorian Building Authority. 23 December 2022. Retrieved 1 December 2023.
  29. ^ Phillips, Alastair; Morris, Antonia (13 April 2023). "Why the 2023 Australian Residential Building and Construction Outlook Isn't All Bad News | L.E.K. Consulting". www.lek.com. Retrieved 1 December 2023.
  30. ^ "Finance in Australia – Market Size, Industry Analysis, Trends and Forecasts (2023–2028)| IBISWorld". www.ibisworld.com. Retrieved 1 December 2023.
  31. ^ Vo, Duc Hong; Nguyen, Nhan Thien (10 October 2020). "Determinants of a global financial center: An exploratory analysis". Borsa Istanbul Review. 21 (2): 186–196. doi:10.1016/j.bir.2020.10.002. ISSN 2214-8450. PMC 7546944.
  32. ^ "Australian National Accounts: Tourism Satellite Account, 2021-22 financial year | Australian Bureau of Statistics". www.abs.gov.au. 12 August 2022. Retrieved 2 December 2023.
  33. ^ Department of Jobs, Skills (5 April 2023). "Economic value of tourism". Department of Jobs, Skills, Industry and Regions. Retrieved 2 December 2023.
  34. ^ Rachwani, Mostafa (22 June 2023). "Melbourne and Sydney bounce back up the world's most liveable cities list". The Guardian. Retrieved 2 December 2023.
  35. ^ "Melbourne ranked most liveable city in Australia and third in the world". Committee For Melbourne. Retrieved 2 December 2023.
  36. ^ Events, Tourism and (28 August 2023). "Visitor Economy Recovery and Reform Plan". Tourism and Events. Retrieved 2 December 2023.
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