In a testament to their burgeoning economic clout, regions from Coffs Harbour to Bendigo are witnessing notable increases in business lending.
Westpac reported a 12.4% rise in loans to businesses in these areas over the past two years, surpassing the 11.3% growth seen in metropolitan regions.
Shane Howell (pictured above), Westpac’s general manager of commercial banking, attributed this trend to a demographic shift.
“As we’re seeing more Australians move from capital cities to regional areas in search of more affordable housing and lifestyle factors, Australian businesses are following suit,” Howell said.
This movement is not only reshaping where Australians live and work but also where they invest and grow their businesses.
According to recent data from Westpac, sectors such as manufacturing, industrial logistics, property, and agriculture are thriving in the regions, thanks to increased credit availability.
“While this data shows only Westpac business lending growth, in most regions it’s representative of economic activity overall,” Howell said.
Despite the positive trends, Howell acknowledged the ongoing challenges.
“No two states or segments are the same and each has its own unique challenges and opportunities,” he said.
Industries like hospitality and retail face growth constraints due to tight discretionary spending, yet professional services and healthcare are flourishing.
Victoria and Tasmania, in particular, illustrated the dynamic changes occurring.
Regional Victoria saw an impressive 18.1% growth in lending from November 2022 to October 2024, significantly outstripping the metro areas.
Tasmania’s aging population and booming agribusiness sector have spurred a 25% increase in regional business lending since 2022.
The trend towards regional investment is robust and ongoing, with Howell optimistic about the future.
“One thing that’s clear in speaking with our customers, is that the trend towards doing business and investing in regional Australia is very real and I think we’ll see a lot more growth in regional areas over the next decade,” he said.
This regional renaissance is not only reshaping Australia’s economic landscape but also offering new opportunities for businesses willing to explore beyond urban centers.
Read the Westpac insights here.
