How to create jobs and boost your economy

Queensland has the worst unemployment rate in the nation. The Australian Bureau of Statistics latest labour force data shows Queensland’s seasonally adjusted unemployment rate has climbed to 6.3 per cent in October. Australia's seasonally adjusted unemployment rate is steady at 5 per cent. But what can be done about it? To learn more, read on.

Globalisation and technology are driving transformation of Australian cities and regions. This change is impacting unevenly across Australia. The rapid expansion of the business services sector is central to jobs growth and increasing prosperity for Australia as a whole, but it is centralising economic activity, jobs and investment in the big cities.

Most of Australia’s regional are economically challenged at the same time that some capital cities are experiencing excessive growth. Whilst the rise of business services is the jobs story of the new millennium, it does not easily translate to Australia’s small cities and regions.

Many regions are experiencing long term population decline arising from the replacement of labour with capital in traditional industries, driven by a combination of technological innovation and market forces. Their economies are narrowing and deepening in common with world-wide trends, with fewer but often bigger industry sectors based on local competitive advantages.

Public interventions in concert with private sector engagement and support can make a difference. Local Councils can help strengthen local business networks and address a range of factors within their control to support regions making better use of these economic endowments. Public interventions aimed at increasing economic performance need to concentrate on these advantages by helping to build new entrepreneurship and capacity to enable a region to capitalise on its opportunities.

Fit-for-purpose economic strategies are the new currency to higher standards of living and a brighter future for regional cities. Successfully responding to the impacts of transformational technologies and the fundamental changes occurring in the Australian economy requires cities taking new approaches to their economic strategies to achieve success.

The risk for cities is that business-as-usual strategies are unlikely to improve their economic outlook. Well researched, evidenced based, risk assessed initiatives are required to improve their economic outlook including engaging more effectively with national and international value chains. Developing new business models and upskilling the local workforce to participate in higher value business opportunities will build wealth and prosperity. Cities need to be seen to be investment ready and need to have an effective on-line strategy to attract the sorts of new investment and residents that will help power up their economies.

MacroPlan is a national economic and regional planning services firm who has been successfully helping many regional cities and towns across Australia to deal with these sorts of transformations. There are ways to grow your economy. Some will require investment decisions and support along the way, but the effort will be rewarded with economic improvements once the fruits of these investments flow through to the local economy.

To learn more about how MacroPlan can help solve your jobs challenge or how to re-invigorate your local economy please call Tony Carmichael or Mark Courtney on 07 3221 8166.

Queensland Government Forum: The Future of Industrial Development

On Monday, Economic Development Queensland invited MacroPlan’s National Principal Strategic Advisor, Tony Carmichael to present as part of their ‘The Future of Industrial Development’ forum. Tony joined Lavinia Dack, Executive Director, Economic Development Queensland and Justin Sherlock, State Manager Queensland, Logos Property.

Those who attended were given a first hand look at what the future of the industry will look like in Queensland and what innovations have already been implemented in industrial estates.  

Tony answered some of the burning questions about the logistics challenge in growing metropolitan cities and how technological disruption is increasing demand for quick delivery of goods and exacerbating pressure on last kilometre delivery. How do we service increasing demand for fast goods delivery in cities at the same time as congestion is increasing? What are the new technology opportunities for industry - automated vehicles and drone delivery? The new technology of automated vehicles and drones will necessarily have a major role to play.

To learn more about how digital disruption will help solve the logistics challenge or how to prepare for this transformation, please email Tony Carmichael or call 07 3221 8166.

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Brian Haratsis presents at 3rd International Driverless Vehicle Summit

MacroPlan is very excited by the huge potential of autonomous vehicles (AVs). Our chairman, Brian Haratsis, is deeply invested in planning for a future which incorporates this technology and maximises its benefits.

The 3rd International Driverless Vehicle Summit - the only event of its kind in Australia - is taking place at the Adelaide Convention Centre from the 31st until November 2. Brian presented during day two’s Planary session on ‘Australia and NZ AV Champions’.

For those who missed it, a copy of Brian’s presentation can be found here.

For further information the impacts of AV’s on our future cities, please get in touch.

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Road congestion to worsen in driverless car world

Australian Financial Review
November 1 2018

The take-up of automated vehicles is likely to lead to much more congestion on roads in the major cities of Australia with the total number of all vehicles in a "mixed fleet" to rise to as much as 30 million by 2030, an economist has forecast.

Brian Haratsis, executive chairman of MacroPlan, said on Thursday there was a substantial shift in the economics of personal transport which would emerge as costs eventually dropped and consumers took far higher numbers of personal transport journeys.

"Congestion is going to get a lot worse," Mr Haratsis told The Australian Financial Review after giving a presentation at an International Driverless Vehicle Summit in Adelaide.

"Roads will become real estate."

He said astute residential real estate buyers were already factoring in the long-range value upside for properties located in good suburbs close to freeways.

Transport users would value the extra time they were able to spend doing work on laptop computers in automated vehicles and "robo-taxis", or in ride-sharing vehicles still physically being driven by a human driver, as they headed to city workplaces.

The total number of vehicles on Australia's roads is about 19 million currently. The number of traditional vehicles would keep growing, but then the total "mixed fleet" including both traditional vehicles and autonomous vehicles could expand to 30 million in just over a decade.

He acknowledged he had contrarian views to many experts in the field. But the proliferation of Uber vehicles and those in other ride-sharing firms would accelerate as the "costs per kilometre" of taking trips dropped. Automated taxis would also trigger an expansion.

Ecommerce weighs on congestion

Online retailing was rapidly growing, and he predicted that by 2025, about 25 per cent of all non-food retail would be happening online.

Even the best online retailers such as Amazon were still trying to perfect the "last mile" - where smooth and efficient deliveries of the goods ordered by online shoppers arrived at their houses.

Autonomous vehicles would play a big role in improving that service - but would also be a big contributor to the growing congestion on roads.

There would also be room for extra drivers of traditional vehicles because of the emphasis on getting the "last mile" right. "Professional driver demand is actually outstripping demand," he said.

He said the average cost of owning and running a vehicle currently was about $8,000 per annum in Australia.

The business models of traditional manufacturing of vehicles was being overturned as technology companies and software experts steeped up their development of autonomous vehicles and it was important to remember that it was the private sector driving the industry.

Science was colliding with economics.

"Driverless vehicles and autonomy is being driven by the private sector not the government," Mr Haratsis said.

Cost key to usage

Makers of autonomous vehicles, once they got the technology absolutely right, could see the extra demand which will be created by the advent of autonomous vehicles if they are priced astutely because the appetite for more personal journeys is there.

"The cost per kilometre needs to halve," he said.

Mr Haratsis said between the start of January 2016 and mid-2017 in Sydney ride-sharing companies such as Uber snared about 15 per cent of total taxi journeys away from traditional taxis, but the overall market for personal journeys had increased by 35 per cent.

ASX-listed Cabcharge is changing its name as the taxi group fights ride-sharing firms, which also include Taxify and Chinese new entrant Didi.

"It's actually about the price per kilometre," he said. While there have been complaints about a surge in prices at Uber during busy periods, ride-sharing firms had shown there was latent demand.

"If the price drops, people will travel more," he said.

Earlier, NSW chief scientist Hugh Durrant-Whyte told the conference he didn't think there would be widespread take-up of autonomous vehicles in his lifetime, and that the problem wasn't in sensor technology, but in the algorithms behind them.

"The problem is the algorithms fail," he said.

Makers need to be absolutely confident that the mathematics behind their algorithms had factored in every possible outcome, and could be completely trusted, and this would take a long time.

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Retail General Manager's observations from recent trip to Perth

I recently visited Perth to meet clients, prospective clients, agents and to see some centre openings and extensions. There are plenty!

There is no doubt that Perth is showing signs of retail spend improvement after a very challenging period of flat or negative growth. This was the message from all of the many people with whom we discussed the market. Consumer confidence hit a 5 year high in the September quarter.

In fact, Deloitte Access Economics predicts WA will have the strongest retail sector of any State over the next five years.

Some of the key ‘take-outs’ from my visit include;

1. Reflecting the east coast, there seems to be higher investor demand for all asset classes other than sub-regionals

2. Consumer spending and confidence is still poor, but showing signs of improvement

3. The bottom end of the retail leasing market is firmer than the middle to upper – retailers are looking for deals and very cautious about big rents

4. Tightening lending policies have softened leasing demand

5. Project leasing is being driven hard by capital leasing incentives

6. Most major shopping centres are looking to food and beverage precincts to underpin expansion plans (same across the country).

7. Aldi are expanding in WA and are being courted by centre owners looking to repurpose space that may become vacant (i.e part sub-regional space). Or add to the centre’s overall appeal, visitation, spend.

8. Owners are looking at other ‘non-retail’ usages to either repurpose poorly performing space or ‘bolt on’ to centres if land is available. Gyms, fitness, medical, childcare – as examples.

Vacancy remains an issue in the suburbs across all asset types. In an increasingly competitive market, centres which have not adapted to compete are showing signs of distress and many will need investment and smart leasing strategies to survive in to the future.

I visited Westfield Carousel on the redevelopment opening day and I must say…wow! The outdoor casual dining opposite the new Hoyts foyer is seriously impressive. Of course it was super busy on opening day but the design, location, ambience and quality of operators should ensure it’s a roaring success. There was plenty of hoarding downstairs in the new fashion wing outside David Jones – many with ‘Coming Soon’, including WA’s first Sephora store. The extend of the fashion precincts is a certainly a sign of the times…we understand even this powerhouse has struggled to secure fashion, with plenty more deals to do. I also visited the impressive Belmont Forum, a Perron asset, which has recently undergone a revamp with a new fresh food offer outside a bigger, new Coles.

Vacancy is still significant in the CBD. I noticed particularly high vacancy in the many arcades and thoroughfares, particularly the smaller shops. though Uniqlo’s recent opening was heralded as a big success and by all accounts they have started well. Hopefully this will be a ‘shot in the arm’ for the CBD, which has seen the first stage of Charter Hall’s Raine Square open, eventually offering 18,000 sqm of retail space including initially Palace Cinemas, Coles Central and Tim Ho Wan. There is a very big emphasis of casual dining in the mix with a number of new entrants to the WA retail market.

Located next to the airport, DFO Perth opened recently with well over 100 retailers, mainly fashion, lifestyle and accessories. We understand that it is trading well so far. The big question is, what will be the impact on other centres, particularly the centres still relying heavily on fashion spend? Time will tell. Reflecting the changing nature of factory outlet assets, DFO will also offer a significant food offer including QSR, cafes and even a Lindt Outlet store.

Author:
Warwick Turpin
General Manager - Retail
02 9221 5211

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