Future shape of the NSW economy

2021-22 NSW Intergenerational Report

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In 2060-61, NSW is projected to have a $1.4 trillion economy. Average full-time wages are projected to grow to $139,000 per year and per capita incomes will be 59 per cent higher than today. We will increasingly rely on productivity to drive economic growth, as the population grows more slowly, and ageing lowers the participation rate. More working age women and people over 65 will be in the workforce compared with today, and more of us will work part-time. Our workforce will be more highly skilled and will increasingly work in the social and business services sectors. Securing our future prosperity will rely on the government, businesses and workers working together to boost productivity growth.

Contribution of population, participation and productivity ('Three Ps') to real NSW economic growth

Economic growth can be attributed to the ‘three Ps’: population, participation and productivity. The chart shows that productivity will be the biggest driver of economic growth over the next 40 years.

Participation defined as hours worked per capita.
Source: ABS 5220.0, 6202.0, 3101.0 and  NSW Treasury.

Participation by age

Workforce participation is highly dependent on age. Participation is projected to increase for all age groups over the next 40 years with the exception of under 25s.

Source: ABS 6291.0 and NSW Treasury.

In 2060-61

 

Illustration of a line chart increasing along the x axis

The NSW economy will be

2.3 TIMES

larger

 

 

Illustration of a wallet

Average full time wages:

$139,000

per year

 

 

Illustration of a calculator

Income per capital will be

59%

higher

 

Insights and opportunities

 

  • NSW is projected to have a $1.4 trillion dollar economy by 2060-61.
  • Full time wages are projected to grow from $86,000 in 2018-19 to $139,000 in 2060-61.
  • The participation rate is projected to decline from 65.3 per cent in 2018-19 to 61.6 per cent in 2060-61, as the population ages.
  • Productivity is expected to grow by 1.2 per cent per year, and this will account for the majority of economic growth.
  • Employment is projected to grow fastest in business services and social services.
  • The jobs of the future will require a more highly skilled workforce, and the skills mix will shift away from manual and routine tasks towards more non-routine and analytical roles.

 

Last updated: 07/06/2021