Trained scientists like objective measurement. Definitive decisions are based on established (measured) facts. A ‘tentative prognosis’ is based on the accrued data. This document serves the purpose admirably where a group of highly credentialed economic/statistical researchers have produced an estimable evaluation of data pertaining to the impact of town bypasses in known and tested situations. Admittedly Gunning, Goulburn and Yass are far removed from the Upper Hunter Valley and the New England Highway. However some of the overarching principles pertain. Perhaps a better analogy could be found comparing Scone to Mittagong, Bowral, Moss Vale and Berrima? The study has yet to be commissioned. Nonetheless there are lessons to be learned. Closer to home we might also compare Bulahdelah; and even Karuah? Berry is on the South Coast but already the early signs of ‘bypass renaissance’ are evident. The prognosis is good; not even guarded.
ECONOMIC EVALUATION OF TOWN BYPASSES Final Report OCTOBER 2012
Prepared by Bruno Parolin
Faculty of Built Environment
University of New South Wales
October 2012 for NSW Roads and Traffic Authority
Economic evaluation of town bypasses
In December 1993 the University of New South Wales was contracted to
Undertake a Research and Development project (original study for the NSW Roads and Traffic Authority (RTA) over eighteen months to investigate the economic impacts of bypass roads at selected towns along the Hume Highway, NSW.
The original study made a number of findings, these included:
- As a proportion of the estimated total economic output of the affected communities the reduction in gross annual turnover at affected businesses is relatively small.
- The reduction in employment due to the impact of a town bypass varied, although was much smaller than predicted.
- Several businesses within the affected towns made compensatory adjustments in response to the diversion of traffic.
- There was no correlation made directly as a result of the town bypass on business closure.
- The economic impacts of a bypass tend to be of short‐term duration, within the first year of the bypass opening. Given that 16yearshave passed since completion of the original study, the RTA has sought to evaluate the longer term economic impact of town bypasses against the findings presented in the original study and identify areas requiring further research.
To this end, the RTA engaged the University of New South Wales in October 2010 to undertake the re‐evaluation.
The objectives of this project are to:
- Review the current literature on the economic impact on town bypasses in Australia and overseas (completed May 2011).
- Re‐evaluate the findings of the previous study concentrating on a small number of case studies.
- Identify areas for further study where gaps in previous research exist. Three of the five original communities studied were selected for the present project; a small community – Gunning; a medium sized community – Yass; and a large community – Goulburn.
The objectives and scope of the present project allows investigation of several research questions:
- What is the nature and types of longer‐term economic impacts of the bypasses on the case study communities?
- How important is the highway and stopping traffic to the economic base of the case study communities given the long lapse of time since the original study?
- How have highway related businesses adjusted over this long period of time?
- What changes have occurred to the main street of the case study communities?
- How adequate is the methodology developed for the project in monitoring the longer term economic impacts of town bypasses?
The results of present re‐evaluation studies undertaken at Yass, Gunning and Goulburn indicate that the longer term economic impacts of town bypasses are positive and have conveyed important economic benefits to these towns.
The key findings from the studies are as follows:
Importance of the highway and stopping traffic
- Number of plate surveys undertaken at Yass indicate that 22.8% of light vehicles and 24.6% of heavy vehicles approaching the town on either side of the Hume Highway during the day that travel
- Through actually stop for highway related needs. The average number of vehicles stopping in Yass since the opening of the bypass has increased from 1188 vehicles per day to 2929 vehicles per day in 2011and this number exceeds the average number that stopped per day before the opening of the bypass (2395) – an increase of 22.2%. Only 4.4% of Light vehicles and 2.9% of heavy vehicles approaching Gunning on either side of the Hume Highway came into the main street and stopped for highway related needs; this is equivalent to 176 vehicles per day. Number plate surveys undertaken in Goulburn indicate that 10.2% of light vehicles and 11.4% of heavy vehicles approaching the city on either side of the Hume Highway during the day that travel through actually stop for highway related needs; on average, approximately 2,272 through vehicles per day now stop in Goulburn – a 127% increase over the figure of 1000 vehicles per day recorded in 1994, but a 37.7% decrease over through stopping vehicles recorded in 1992 prior to the opening of the Goulburn bypass.
- Of the estimated 1536light vehicles and 370 heavy vehicles that were through stopping vehicles
- At Yass, approximately 65.8% and 61.5% respectively stopped at the Yass service centre. In the case of Goulburn, 64.1% of light vehicles and 57.7% of heavy vehicles that travel through stop at the service centre located off the western interchange. Economic evaluation of town bypasses
- It is estimated that the total value of highway generated trade originating from expenditures made by travellers stopping and staying overnight in 2011 is likely to be in the order of $71.5 million at Yass; $4.4 million at Gunning, and; $84.6 million at Goulburn. This corresponds to 23.1% of total town product at Yass, 15.6% at Gunning and 13.7% at Goulburn – a more realistic measure of the relative contribution of highway generated trade to the total town economy.
- Using estimates of highway generated trade and total economic output at Yass from the original study, the value of 23.1% of total town product is larger than the corresponding value before the opening of the Yass bypass (13.2%), after adjusting for inflation. Therefore, highway generated trade in 2011has a significantly larger input to the local economy of Yass than it did even before the bypass opened.
The nature and types of economic impacts of bypass roads and changes on the main street
- There has occurred a high level of turnover of highway related businesses since the original study on the main street of the case study towns. At Yass, 40% of the businesses surveyed in the original study (83businesses) have closed and 37.8% are under new ownership. At Gunning only 1 of the businesses included in the original study (10businesses) had closed but there are now a total of 9 new businesses on the main street and on surrounding streets that serve the needs of highway travellers. There has occurred considerable change on the main street of Goulburn as well, and there has occurred the development of the service centre.
- In total, the 77 highway related businesses surveyed at Yass weren estimated to account for approximately $118 million in gross annual turnover for 2009 ‐ At Gunning, the 20 highway related businesses accounted for $4.22 million in turnover, while the 135 businesses surveyed at Goulburn accounted for $141.2 million in turnover for 2009 ‐ 2010.
- A comparison of the gross annual turnover figures for businesses in the original study with total town product, before the opening of the Yass and Goulburn bypasses, with corresponding turnover figures for 2009 ‐ 2010 for businesses surveyed as part of the present study indicates that, after adjusting for inflation, the turnover at highway related businesses at Yass is 28.5% larger than before the opening of the Yass bypass. At Goulburn, the gross annual turnover of highway related businesses before the opening of the bypass (1992) was 26.1% of the indicative value of total economic output, whereas in 2009 ‐ 2010 it is estimated to be only 12.1% of the total town economy – an indicator of the declining importance of the highway related sector in Goulburn despite the growth in through stopping traffic.
Business adjustments in the post bypass environment
- Very few businesses were affected in the longer ‐ term in the post bypass environment. Those that were experienced some further declines in their gross annual turnover, but this did not affect jobs, salaries or working hours at these businesses. Many of the business adjustments in the post bypass environment now focus on advertising and promotion using the new internet media, and on diversifying their product range and improving service levels to customers to remain competitive
- Perceptions business survey respondents of the longer ‐ term impacts of the bypass on the economy of the town more generally, on the town as a place to live and on their respective businesses highlights, with some exceptions, overwhelming positive responses. Quality of life aspects and potential for longer term economic development were two key positive perceptions of a highway bypass.
- Application of the methodology to the re ‐ evaluation of the original study at the three case study towns highlights that in the longer ‐ term these communities do recover to varying degrees from the negative impacts of bypass roads as documented in the original study, even the smallest community, and as anticipated in the original study and in the review of literature. This is an indication that the methodology used in the original study and in the present study is appropriate and sufficient for monitoring long term impacts of bypass roads.
- To a large extent the findings of this study mirror those identified in the review of literature – that in the longer term highway bypasses do not have adverse economic impacts on towns that are bypassed and that in most cases bypasses have resulted in economic development benefits for towns which have been bypassed. The findings highlight that the most significant economic benefits of being bypassed have occurred at the medium sized town of Yass and not at the largest centre (Goulburn) as expected from the review of literature.
- The conclusion to be made from the above findings is that degree of dependence on highway generated trade is a more critical variable than population size in understanding post bypass economic change at the case study communities.
- The findings of the present study indicate that proximity to a larger centre is in fact of benefit to highway related businesses, especially at the medium and smaller places, and influential in post bypass economic change – a contrary finding to that reported in the review of literature.
- Whether the economic benefits to towns that have been bypassed or are to be bypassed in the future, and that are not in close proximity of a larger centre or have no service centre, will be similar to those of the case study communities remains a topic for future research.