The Hunter region is set to experience a significant economic transformation, with a projected 34,000 new jobs over the next five years. This growth is primarily attributed to the energy transition and infrastructure projects, marking a pivotal moment in the region's development. The analysis by KPMG's Enterprising Cities report highlights the region's resilience and potential, despite economic headwinds. The post-COVID jobs boom, which created 43,000 roles, has stabilized, and the region is now poised for long-term growth. The unemployment rate remains low, at 4.4% in December, while workforce participation rates continue to rise. This positive outlook is further bolstered by the surge in businesses with turnovers exceeding $10 million, increasing by 17% in the past two years, and mid-sized businesses with turnovers between $5 million and $10 million growing by 12%. The shift towards renewable energy production, including battery storage, transmission infrastructure, and substations, is expected to invigorate the economy. However, the region faces challenges, such as fuel price shocks linked to the conflict in Iran, which could impact diesel-reliant sectors like construction and mining. Despite these obstacles, the Hunter region is punching above its weight, with large-scale investments and resilience through recent shocks boosting confidence. The region's strong business growth, particularly at the top end, is attracting skilled workers, making it a competitive business hub. However, the report also highlights a sobering trend in the national view, with gross profit margins excluding mining falling due to rising operating costs and cost-of-living pressures. The Hunter's economy, heavily reliant on sectors with thin profit margins, is being squeezed by these rising costs and cooled consumer sentiments. Retail and hospitality, which experienced post-COVID surges, are now shedding jobs as home budgets tighten. Construction, despite being the third largest employer, is facing flattened home building trends and steady job numbers. The housing market is also strained, with price points for newly approved dwellings skewing to the top of the market, impacting the region's liveability. Lower-income earners and renters are particularly affected by this trend. The construction industry, while dominant, is characterized by non-employing sole traders and small businesses employing fewer than five people. However, the region's manufacturing and infrastructure sectors are showing strength, with numerous job ads for technicians, trades, operators, and drivers, indicating optimism for the long-range outlook. The Hunter economy is diversifying, adding knowledge-based roles to support its traditional powerhouses. Analysts predict that broader nation-building investments, such as planning studies for high-speed rail and guided weapons manufacturing, will further strengthen the region's economy, making it increasingly attractive to new residents. In conclusion, the Hunter region's economic future looks promising, driven by the energy transition and infrastructure projects. However, it must navigate challenges and adapt to changing market conditions to ensure sustained growth and prosperity.
