While dining out has boomed around Australia, it has seen the biggest growth in Western Australia. But why? Was it café culture? Deregulation of liquor licensing? Professor of Finance Robert Powell cracked the numbers and found that mining was the biggest driver by far.
The Western Australian mining boom added AUD$4.8 billion to the state’s dining industry between 2004 and 2015, Edith Cowan University (ECU) research has found. The industry saw a further $900 million boost attributable to factors such as a growing coffee culture, the proliferation of ‘small bars’, busier lifestyles and food fashion, including the rise of cooking shows and dining apps.
Overall from 2004 to 2015, the dining industry grew by 139 per cent, with a 69 per cent spike in employment.
“The mining boom accounted for more than half of the growth in the dining industry during this time, with the remainder attributable to growth that would have occurred anyway,” said Professor of Finance Robert Powell from ECU’s School of Business and Law.
“WA’s dining boom was almost double that experienced in the rest of Australia and had twice the growth of the state’s grocery industry.”
Sixty-nine per cent of this expansion occurred in Greater Perth. Professor Powell said that if the boom had never happened, WA dining would have increased in value by $3.3 billion, based on historical trends related to spending, population growth and consumer preferences. In total, the dining sector added an extra $8.9 billion to the WA economy during the boom years.
While 2004 to 2015 saw huge increases in restaurant employment and wages, researchers also note the impact its end has had. In 2016, dining industry jobs fell by five per cent, with full-time employment dropping by 25 per cent and part-time employment rising by nine per cent. There was also a swing away from cafes and restaurants, which contracted by two per cent, and a move towards more takeaways, a sector that rose by 3.75 per cent.
“As spending on eating out is a discretionary household purchase, it is volatile and reacts to shocks, whether at the local or global level,” Powell said. “These correlations provide evidence of the strong link between mining and dining.”
The downturn is another indication of how WA needs to diversify its economic base.
“Like many other sectors, the dining industry cannot continue to rely on mining to boost it, which suggests government and industry need to formulate policies to support non-mining industries,” Professor Powell said.