Hobart’s $10 Billion Economy? The Numbers Need a Closer Look

Hobart’s economy has passed $10 billion. That is a milestone worth acknowledging.

The recent 2026 State of the City report also points to more than 67,000 jobs across the City of Hobart, unemployment of 2.9 per cent and $270 million in non-residential building approvals. But those figures do not tell us everything about the health of our commercial centre.

A new analysis prepared by Spectrum Analysis for Edwards Property examines six Greater Hobart commercial catchments between 2011 and 2025. Its Hobart catchment - the Hobart and West Hobart SA2s - recorded only 7.5% growth in registered businesses, while estimated employment fell 31.2%. Businesses employing 20 to 199 people fell from 302 to 202. Retail businesses declined 24.6% and financial and insurance businesses 47.1%.

The employment figure is modelled rather than a direct headcount, which the report acknowledges. However, its sensitivity testing still shows a substantial decline under every scenario.

It is interesting to note that this does not contradict the State of the City report. The reports measure different geographies and different things. The $10 billion figure is economic output across the whole municipality. The Spectrum report examines businesses within a smaller central catchment. A city can produce more economic value while its traditional commercial centre loses medium-sized employers.

The comparison with surrounding areas is important. Cambridge, Brighton, Kingston and Rosny Park all recorded gains in both registered businesses and estimated employment. Kingston’s estimated employment rose 58.4% and Cambridge’s 38.1%. Hobart was the clear outlier.

There are reasonable possible explanations.

Banks have consolidated branches. Online shopping has changed retail. Working from home has altered the daily office population. Population and commercial development have increasingly moved outward. Suburban commercial centres may also offer advantages in access, parking, newer premises and proximity to growing residential areas.

We could argue bike lanes, saturation of parking spaces in fact.

The report reveals another structural change. Across the six catchments, non-employing businesses grew 33.7% and businesses with one to four employees grew 31.6%, while businesses employing 20 to 199 people fell 26.2%. We are seeing more micro-businesses, but fewer substantial employers.

The night-time economy adds another piece to the puzzle, but it must be described accurately.

The widely quoted $1.1 billion is not turnover for the whole CBD, nor is it simply money spent after dark. It is annual sales turnover generated by 655 businesses classified as Hobart’s Core Night Time Economy. The national methodology explicitly acknowledges that these businesses may also trade during the day, meaning their employment and turnover figures can include daytime activity.

The latest annual comparison is clearer.

Core night-time economy turnover increased 10% in 2023–24, while Hobart CPI rose 2.7% in the year to June 2024. That indicates genuine growth above inflation for that year and should be recognised.

CPI belongs against dollar figures. It does not adjust business counts or job numbers.

Business costs have also been rising. Commercial rents do not have a single CPI-style index for Hobart, but available office-market data suggests prime CBD rents have risen from around $345 per square metre in 2018 to broadly $350–$500 per square metre by 2025 - an indicative increase of about 3 per cent a year at the midpoint. Retail rents vary enormously by location, but can reach $900 per square metre.

Add wages, insurance, electricity, finance and other operating costs, and nominal turnover growth alone tells us very little about whether a business is actually becoming more profitable.

Taken together, these reports do not say Hobart is failing. They say something more important: Hobart is generating considerable economic value, while the geography and structure of its economy are changing.

An elected members role is to understand why - and ensure that prosperity translates into viable businesses, employment and a thriving city centre.