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The Location of Industry in the Newcastle Region By THE LOCATION OF INDUSTRY IN THE NEWCASTLE REGION BY HAMDI AMIN SOLIMAN B.Ec. SUBMITTED IN FULFILLMENT OF THE REQUIREMENTS OF THE DEGREE OF MASTER OF SCIENCE IN APPLIED GEOGRAPHY The University of New South Wales June 1973 I certify that the material contained herein has not been presented for a higher degree to any other Un i v er s i t y or I n st i tut i on • H.A. Soliman ;::, ~;.___ June 1973 CONTENTS ACKNOWLEDGEMENT iv ABSTRACT V LIST OF TABLES vi LIST OF FIGURES viii LIST OF APPENDICES ix 1 INTRODUCTION 2 LITERATURE REVIEW 7 3 INDUSTRIAL STRUCTURE, DISTRIBUTION AND GROWTH 22 4 SURVEY OF LOCATION FACTORS 79 5 INPUT-OUTPUT PATTERNS OF MANUFACTURING 108 6 ANALYSIS OF INTERRELATIONSHIPS AMONG LOCATION VARIABLES 1 34 7 SUMMARY AND CONCLUSIONS 1 63 REFERENCES 1 71 BIBLIOGRAPHY 1 77 APPENDICES 1 81 ACKNOWLEDGEMENTS Most of this research was prepared while I was seconded from the N.S.W. Department of Decentralisation and Development to the Hunter Valley Research Foundation as a Post-Graduate Research Scholar. am grateful to the staff of the Foundation, specially Professor C.C. Renwick, for their support and encouragement. I am also indebted to the · Foundation for facilities provided in carrying out the location survey conducted during 1969. I am very grateful for the interest and encouragement of the School of Geography, the University of N.S.W., particularly to Mr. D.J. Webb for his valuable criticism and careful supervision on all aspects of this research. For assistance in the computer processing of much of the statistical data used in this study, I am indebted to Dr. D. Jeffrey and Mr. J.R. Geissman. The Study would not have been possible without the co-operation of manufacturing firms in Newcastle I am most thankful to those company executives who gave time to be interviewed and provided the valuable information upon which this study is based. Miss I. Hakki deserves a special mention for her efforts in typing the final manuscript. ABSTRACT -This study sheds light on the Newcastle Region as an area containing the Newcastle Urban Complex as its major concentration of manufacturing activities. Generally the study aims at evaluating and investigating the relative importance of the various regional factors influencing the location pattern of manufacturing activities in the Newcastle Region. The basic emphasis is on the locational decisions of the manufacturing firms in the region. The themes of investigation ranges through many aspects of the manufacturing geography of the region which have interrelated with one another. The study examines the structure, distribution and growth of manufacturing in the region. An attempt is made to evaluate the relative importance of the various regional factors influeincing the location pattern of manufacturing activities within the region. An analysis is then made of the locational significance of linkages developed arrong the region's industries on one hand, and between the region's industries and industries outside the region on the other. Finally, a factor analysis technique is applied to develop a simple framework of factors whose interplay can adequately represent the interaction of the wide range of the various location factors with many variables related to the location process. LIST OF TABLES 1 Industry in Newcastle, 1967/68 25 2 Industrial employment in the Newcastle Region compared with N.S.W. and Australia, 1967/68 26 3 Industrial employment in the Newcastle Region compared with other industrial areas in N.S.W., 1967/68, 28 4 The composition of workforce in the Newcastle Region, N.S.W. and Australia 29 5 The composition of workforce in the Newcastle Region (actual number of employees) 31 6 Size of firms in the Newcastle Region 36 7 Distribution of manufacturing activities within the Newcastle Region, 1967/68 40 8 Multiple magnitude and intensity ratings for the Newcastle Region 42 9 Distribution of manufacturing within the Newcastle Region 45 1 0 Distribution of industry in the Newcastle Urban Complex 50 1 1 Firms employing over 300 persons in the Newcastle Urban Complex 54 1 2 Index of industrial specialisation for the Newcastle Urba0 Complex 56 1 3 Coefficient of localisation for the Newcastle Urban Complex 63 14 Number and cost of factories built in Newcastle and suburbs, 1954/1968 66 1 5 Manufacturing employment, value of production and salaries paid, 1954/1968 69 1 6 Industrial output in Newcastle and N.S.W., 1964/68 70 1 7 Industrial output in the Local Government Areas of the Newcastle Region 74 1 8 Employment size categories and dates of establi­ shment for the 75 firms responded to the location survey 82 1 9 Employment in the 75 firms responded to the location survey 85 20 Regional location factors, weighted averages for 42 firms established after 1945 90 21 Regional location factors, weighted averages for 33 firms established before 1945 91 22 Regional location factors, weighted averages by industry groups 94 23 The importance of market factors by industry groups 101 24 The importance of material factors by industry groups 104 25 The importance of material factors compared to other factors before and after 1945 105 26 Estimated proportion of crude materials to a·11 materials used by industrial firms, weighted average by No. of employees 110 27 Port of Newcastle: ranked selected imports, 1969/70 111 28 Origin of material inputs for industry in Newcastle 114 29 Types of markets for industry in Newcastle 124 30 Port of Newcastle: ranked selected exports, 1969/70 125 31 Overseas exports of iron and steel products through the Port of Newcastle 128 32 Industry outflow in Newcastle 130 33 The unrotated factor matrix 142 34 Varimax rotated factor matrix 144 35 The canrnunalities of varimax rotated matrix (h2 X 100) 145 36 Factor score matrix for the 75 firms 155 LIST OF FIGURES Map of the Newcastle Region 23 2 Map of magnitude and intensity ratings in the Newcastle Region 43 3 Map of industrial employment in the Newcastle Urban Complex 52 4 Map of index of specialisation in the Newcastle Urban Complex 60 5 (A) Factor axes ( I & I I) i den ti fi ed with 1oadings of varimax rotation 147 5(B) Factor axes (II & 111) identified with loadings of varimax roatation 148 5(C) Factor axes (I & Ill) identified with loadings of varimax rotation 149 6 (A) Firms profiles for factor 1 57 6(B) Firms profiles for factor I I 1 58 6 (C) Firms profi 1es for factor I I I 1 59 LIST OF APPENDICES 1 Classification scheme of industrial suburbs in the Newcastle Urban Complex 1 82 2 Introductory letter for the location survey 184 3 Location of industry survey 1 85 4 Site location factors, weighted averages by industry groups 189 5 Relocation factors, weighted avarages by industry groups 191 6 Correlation matrix for the 29 variables 192 CHAPTER ONE INTRODUCTION Better understanding of the forces underlying the emergence of a particular industrial location pattern is essential, not only in developing public policies but also in assisting industrial firms in their location and expansion decisions. The literature on industrial location factors applicable to areas and regions in the United States and Britain has increased considerably in recent years. In Australia, this subject has not received sufficient attention ex~ept for few attempts such as that by Logan in Sydney (1964), McKnight (1967) and Smailes (1967) in South Australia, and the recent study by the Institute of Urban Studies in Sydney (1970). All these contributions have concentrated on analysing the intra­ metropolitan aspects of the location decision based on variables operating inside metropolitan areas, except for Linge's study of the location of manufacturing in Australia (196i) which analysed the location choice of general regions. No other attempts have been made in Australia towards understanding the location process from the regional point of view. The question of the merits of the various regions or cities within Australia 2 always comes first in the location decision, though it has been virtually ignored in the Australian literature. Logan (1963) has made a passing reference on these two aspects of the location decision in Australia and indicated that "In Australia most manufacturing firms are forced to make at least two kinds of location decisions, one involving the merits of the six capital cities, and the other based on variables operating inside the metropolitan areas". But then he made it cl ear that he wi 11 only be concerned with the behaviour of the individual manufacturing firm within the metropolitan area of Sydney. The Newcastle Region is the second major concentration of manufacturing activities in N.S.W. Yet no attempt has been made to investigate the industrial location pattern of the region either on the intra-metropolitan or the regional levels. Generally, this study aims at evaluating and investigating the relative importance of the various regional factors influencing the location pattern of manufacturing activities in the Newcastle Region. The basic emphasis is on the locational decisions of the manufacturing firms in the region. Following this introductory chapter, a review of the relevant geographic literature in the field of industrial location analysis is attempted. Subsequently, an analysis of the following aspects of secondary industry in the region will be made: its importance within the region and in relation to the state and national economies, its importance to other economic j sectors within the region, its size categories and its main characteristics. The spatial distribution of secondary industry in the region is then analysed by using some traditional methods for measuring the localisation of industry such as the 11 index of industrial specialisation11 and the 11 coefficient of localisation 11 • The characteristics of manufacturing growth are then accomplished by analysing the major changes in the structure of secondary industry in the region, the growth of industrial production and the workforce.
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