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Confidence in local economy

What is the indicator?

This indicator is measured using surveys which ask people to rate how well the local economy is doing in providing jobs and other opportunities for local residents and workers. It has similarities to the Consumer and business confidence indicator, but focuses more specifically on ratings of performance of a local economy, and how well the economy is supporting wellbeing of local residents through providing local jobs and income earning opportunities.

What can this tell us about wellbeing?

Living in a community that provides meaningful job and income earning opportunities supports wellbeing of residents. However, it is important to examine whether the types of opportunities being provided are ones that support a high quality of life.

Advantages and disadvantages of this indicator

Advantages: Confidence in the local economy’s ability to provide opportunities for meaningful livelihood is an important aspect of wellbeing. Being able to have a good livelihood is important for those who are in the labour force, and their households.

Disadvantages: Sometimes an economy can provide a lot of economic opportunities – but many of those opportunities have potential to harm wellbeing. For example, if an economy provides many jobs, but those jobs involve long work hours in high risk job environments, then despite the opportunity to earn income, overall wellbeing may be negatively affected by reduced social connection and personal health. Ideally, this indicator should be accompanied by others that examine working conditions, such as work hours, health, safety and income relative to living costs.

What measures should I use for this indicator?

This indicator is measured by including questions about confidence in the local economy in a survey. Many national surveys include measures of economic confidence; these typically have samples that allow insight into how national confidence is changing, and confidence in some states and territories. However, they do not provide data for small areas such as individual local government areas.

The University of Canberra Regional Wellbeing Survey includes measures of confidence in the local economy each year, and these data are publicly available in two forms: data tables that are updated annually, and the Regional Wellbeing Dashboard. These provide data for many, but not all, local government areas (LGAs) across Australia; where sample sizes are too small to show data for a specific LGA, data are made available for the larger region the LGA is a part of.

Measures

Confidence in the local economy – Regional Wellbeing Survey measures

What is measured and why?

The Regional Wellbeing Survey includes a number of questions measuring amenity and liveability of local areas. These are published annually in data tables and the Regional Wellbeing Dashboard. Data are published for Australia, states and territories, regional Australia, and a range of geographic regions. The smallest scale at which data are available is the local government area (LGA), although sample sizes are too small to report data for some smaller population LGAs in rural Australia. Where this is the case, findings are published for a larger region that includes that LGA.

When to use, when not to use, and interpretation

You can use measures of confidence in the local economy from the Regional Wellbeing Survey in a number of ways:

Directly source data about your community or region from the results published each year in data tables and the Regional Wellbeing Dashboard
Include the same questions in your own survey, and draw on Regional Wellbeing Survey data to provide comparison data that enables you to assess how your community is going compared to others of similar size, or to the average for regional areas in your state/territory, or across regional Australia, urban Australia, or Australia as a whole.

An increase in confidence in the local economy can be an indicator of positive wellbeing, although not always. Meanwhile a decrease typically indicates potential for reduced wellbeing. As noted in the indicator description, it is possible for an economy to be providing jobs and income while also contributing to poor wellbeing through issues such as long working hours or other types of poor working condition; or through challenges such as high job availability resulting in lack of availability of local housing. That means that measures of confidence in the local economy must be combined with other indicators examining things such as living cost affordability and working conditions to provide a better understanding of whether a strongly performing local economy is actually supporting the wellbeing of residents.

Data sources

The primary data source available for this indicator is the Regional Wellbeing Survey. Data are updated annually, and available in two formats: data tables, and the Regional Wellbeing Dashboard.

The questions included in the Regional Wellbeing Survey are described below; some of these are combined into an index published each year in the RWS data tables called the ‘Community economic wellbeing index’. Other questions in the RWS also provide insight into local economic confidence; see the Local job opportunities and Living cost affordability indicators.

Question/item	Response options
Local businesses in this town are doing pretty well at the moment	7 point scale from 1 (Strongly disagree) to 7 (Strongly agree), with a ‘Don’t know’ option also provided
The local economy is…	7 point scale from 1 (Getting worse) to 7 (Getting better), with a ‘Don’t know’ option also provided
Community economic wellbeing index	This index is the average score of responses to three statements, all measured on a 7 point scale from 1 (Strongly disagree) to 7 (strongly agree): There are plenty of jobs available around here at the moment; (ii) Local businesses in this town are doing pretty well at the moment, and (iii) This community is financially well-off