At the end of 2006 Landsburys undertook a market study of a major mixed-use development in South Australia.  There were several interesting findings in this study especially involving the strength of the economy and employment opportunities within the region.  A strong economy supports a growing population base, which in turn leads to an increased demand for residential property.  Beneath are just a few of the interesting facts uncovered during our investigation.

The South Australian economy is healthy with the total number of people employed full time peaking in November 2006 with 762,400 (seasonally adjusted) persons.  Between January 2000 and January 2007 the number of persons employed has grown by 11% and the unemployment rate has declined by 2% to the current 5.7%.  Over the same period the number of persons employed in New South Wales has grown by 12% whilst the unemployment rate has declined by only 0.9% to 5%.  This shows South Australia has been successful in providing job opportunities and in terms of employment growth is on par with New South Wales. 

Employment growth in South Australia is caused by a number of factors.  According to a recent survey, Adelaide was ranked in the top three most cost-competitive cities in the world for key industry sectors including automotive, aerospace, medical devices, precision manufacturing, plastics, web and multimedia.  According to the State Government’s “South Australia, A Brilliant Blend”, South Australia has 221 major projects underway or in the pipeline with a total value of $25 billion.  These projects represent immediate direct investment opportunities that will substantially lift the quality and quantity of infrastructure in the years to come, creating additional business opportunities and employment activity.  The state is also benefiting from strength in a number of industries.

The expansion within the South Australian defence sector is creating a variety of jobs and future employment opportunities.  In May 2006 the Adelaide based Australian Submarine Corp gained a contract with The Air Warfare Destroyer (AWD) Program, which is one of the most significant shipbuilding projects undertaken in Australia, worth up to $6 billion.  This project will create over 1,000 direct jobs while creating another 2,000 indirect jobs.  The Australian Submarine Corp also gained a 10 year deal to maintain and upgrade the AP-3C Orion aircraft fleet, valued at over $1 billion.  The State Government State Defence Sector Plan aims to increase the number of defence related jobs in South Australia from 16,000 to 28,000 by 2013 and build the contribution of the state’s defence sector to $2 billion, from $1 billion, in the same time frame.  Conveniently the ex-Defence Minister Senator Hill, the current Minister for Finance Nick Minchin and the Minister for Foreign Affairs Alexander Downer are South Australians.

According to the South Australia Premier, the mineral resource sector directly employs more than 10,000 South Australians.  Over the next five years, employment within the industry is expected to almost double as a result of the $10 billion worth of projects that are either under way or in the pipeline.  The South Australian Government strongly supports the industry and is continuing with their $22.5 million package of industry incentives.  The State Government is establishing Mining and Heavy Engineering Skills Centres in the Upper Spencer Gulf and Ceduna, with the aim of creating 600 extra training and semi-skilled jobs.

Mining is a huge industry in South Australia and is providing employment opportunities to the region.  BHP Billiton is examining the viability of a proposed $7 billion extension at its Olympic Dam Mine, the world's largest copper-uranium mine, the fourth largest remaining copper deposit in the world and the largest uranium deposit.  This expansion could create an average of 10,300 jobs per year in South Australia during construction and once operational would have a total of 14,600 jobs state wide.  Oxiana is developing the Prominent Hill copper-gold mine in central South Australia.  This project is believed to be worth $775 million and will create around 400 ongoing jobs.  Terramin Australia Limited has been granted a lease to develop the $63 million Angas Mine, south of Adelaide.  This mine is scheduled to come into production by September 2007 and is forecasted to create more than 100 jobs.  Australian Zircon’s Mindarie heavy mineral sands project will commence production in early 2007.  The project cost is approximately $70 million. 

Employment opportunities are a positive attribute in assisting with a growing population.  In the twelve months to June 2006, the South Australia population grew by 0.8% whilst the New South Wales population grew by 0.9%.  A positive benefit of a growing population base is additional demand for housing.  The following chart shows the number of residential building approvals within South Australia by financial year.  Since 2001/02, the number of residential approvals has remained relatively stable, which is unlike the trend witnessed in New South Wales and Victoria where the number of approvals bottomed out in 2005/06.  If the remaining 6 months of 2006/07 trend is extrapolated we can assume the number of approvals will remain constant.  This suggests demand for residential housing will remain constant at this time, as the economic fundamentals are still strong.