Sydney’s big economic divide: Where jobs are thriving, and where they aren’t

Parts of Sydney have defied the economic effects of higher interest rates, elevated petrol prices and falling house prices to register the lowest unemployment rates in the country.Unemployment in Australia climbed to 4.5 per cent in July, the equal highest level in almost five years, but in three Sydney regions, the jobless rate was below 3 per cent, new modelling by the Australian Bureau of Statistics shows.The lowest is the Sutherland area, where the unemployment rate is 2.2 per cent, which was also the lowest of any region in Australia. Next best was the Northern Beaches at 2.6 per cent, the second lowest nationally, followed by the Eastern Suburbs with 2.8 per cent, also the third lowest in the nation.The unemployment rate in 12 of Greater Sydney’s 15 regional statistical areas was at or below the national jobless rate last month.But the local area labour force modelling revealed some parts of west and south-western Sydney have much higher unemployment rates than the rest of the city. The highest was in Sydney’s South West statistical district, which takes in Liverpool, Fairfield and Green Valley, at 5.6 per cent. Next highest was Parramatta (5.3 per cent) and Blacktown (4.9 per cent).Australia’s highest regional unemployment rate was in Outback Queensland at 7.3 per cent. Melbourne West was next at 6.4 per cent.Among the states, Victoria and Tasmania had the joint highest unemployment rate of 5.1 per cent.In NSW, unemployment was 4.2 per cent in July, up 0.2 per cent compared with June. The rate for men, 4.4 per cent, was higher than for women at 4.1 per cent.AMP chief economist Shane Oliver said the NSW jobs market had been resilient despite three interest rate hikes this year, elevated petrol prices and a slump in property values.Workers in the CBD. Some Sydney regions of have very low rates of unemployment Louie Douvis“You’d normally think NSW would be more vulnerable to higher interest rates, and also a property downturn because the house-price-to-income ratios and debt ratios are much higher in that state than elsewhere,” he said.“But NSW still has an unemployment rate below the national average. It is matching Queensland’s rate and has a lower rate than Western Australia, which is not too bad.”The headwinds buffeting the state economy have been offset by booming investment in data centres and clean energy.The NSW government last week said economic activity associated with new data centres and renewables projects was a “key reason” the state has avoided a recession.Even so, Oliver said unemployment in NSW was likely to “head a bit higher” in the months ahead as the recent interest rate hikes and lingering property market weakness drag on the economy.The Reserve Bank lifted interest rates in February, March and May and Sydney house prices have been declining since. Oliver estimates property values in the city have dropped about 6 per cent from their peak early this year. He believes further falls are likely.The state budget in June forecast the NSW economy to grow by a sluggish 1 per cent this financial year and it predicted the state’s unemployment rate would drift higher over the next 12 months.Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.Matt Wade is a senior economics writer at The Sydney Morning Herald.Connect via X or email.From our partners