Drought knocks $145 million out of Wagga region GDP: SGS Economics and Planning

A new report by SGS Economics and Planning estimated that Wagga, Junee, Temora, Coolamon, Cootamundra, Gundagai and Lockhart's combined $5.8 billion gross domestic product declined by 2.5 per cent during 2018/19.

The city and region's projected economic losses represent a worse result than the average for regional areas in both NSW and Victoria, which saw 0.3 per cent and 1.4 per cent declines, respectively.

SGS planning and social analysis national leader Terry Rawnsley told The Daily Advertiser that drought was "the big driver" behind the region's economic decline.

"While Wagga has done a lot worse than the regional NSW average, it has done a lot better than the surrounding areas like Young, Griffith and Upper Murray," he said.

"The agricultural production falls which wipes income off, but if you have a regional centre like Wagga it helps to offset some of the falls because you have other things happening outside of agriculture."

Mr Rawnsley said Wagga's five-year average of 1.2 per cent economic growth was "pretty healthy for a regional centre".

"There are some positive things happening but it's just that the drought has come along and impacted the agricultural production, which flows through to the spending in Wagga itself," he said.

According to SGS, agriculture and forestry contributed $693 million to the Wagga region's GDP in 2018/19, with $916 million from health and education and $1.1 billion from the industrial sector.

Committee 4 Wagga chief executive Alan Johnston said he expected Wagga to swing back to its average growth rate when the rains returned.

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"I think [SGS] have made the right assumption about the drought and this has probably been the worst year for Wagga for a while," he said.

"Despite that, our five-yearly growth rate is still very solid and that's reflective of the diverse nature of the Wagga economy.

"We are a significant city in the Riverina and what happens in the Riverina affects us and you can see from the numbers that agriculture and transport are being affected by the reduced output."

Mr Johnston said the state government's investment in healthcare and attracting more industrial businesses to Wagga would help the city recover when drought ended.

"I don't think it's all doom and gloom," he said.

"We are all wanting to see it rain and that does wonders for agriculture and the community as a whole, but in the mean time we are looking at the new construction to provide jobs."