City of Sydney

Location quotient by industry

In 2022/23, Financial and Insurance Services was a major specialisation in the City of Sydney in terms of Employment (Total).

The location quotient is a simple way of seeing which are the main industries in an area, relative to the wider region. LQ shows the percentage of the local economy characteristic (eg. employment, value add) in a particular industry divided by the percentage of the wider area (region, state, nation) that this industry makes up.

  • Where LQ=1, that industry is exactly as prevalent as in the wider region.
  • A LQ greater than 1.2 indicates a significant specialisation of the industry in the local area – possibly a key economic strength. Higher numbers mean greater specialisations. Anything over 2 is a major specialisation.
  • A LQ between 0.8 and 1.2 means the industry is broadly similar in importance in the local area compared to the comparison region and could be seen as representative.
  • An LQ under 0.8 indicates an industry which is more important in the region than the local area, and may represent an economic weakness or opportunity for growth.

LQs should be analysed in combination with the proportional economic share that industry represents. For example, an industry with an LQ of 2 reveals a specialisation but if that industry only represents 3% of the local economy, it may not be significant. Compare with the figures on the Employment by industry (Total), Employment by industry (FTE), Value added pages for this context. National Economics (NIEIR) - Modelled series

Data source

National Economics (NIEIR) - Modelled series

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Location quotient
City of Sydney - Employment (Total)2022/232008/09Change
Industry (Click rows to view sub-categories)%. Greater Sydney%Location Quotient Greater Sydney%. Greater Sydney%Location Quotien Greater Sydney2022/23 - 2008/09
Agriculture, Forestry and Fishing0.10.40.210.10.40.15+0.36
Mining0.40.31.470.30.31.27+0.16
Manufacturing1.65.80.272.99.10.32-0.16
Electricity, Gas, Water and Waste Services0.71.00.771.01.00.99-0.22
Construction3.08.10.375.38.60.61-0.39
Wholesale Trade1.33.50.363.05.30.56-0.35
Retail Trade5.59.20.594.99.90.50+0.19
Accommodation and Food Services4.55.70.806.26.21.00-0.19
Transport, Postal and Warehousing2.85.80.484.56.00.74-0.35
Information Media and Telecommunications5.02.81.776.53.22.04-0.13
Financial and Insurance Services20.97.12.9518.86.62.83+0.04
Rental, Hiring and Real Estate Services2.41.91.271.91.81.05+0.21
Professional, Scientific and Technical Services26.412.72.0917.39.41.85+0.13
Administrative and Support Services3.53.11.114.53.51.30-0.14
Public Administration and Safety7.56.01.268.15.91.39-0.09
Education and Training4.68.00.584.77.30.64-0.10
Health Care and Social Assistance5.513.70.404.910.10.48-0.17
Arts and Recreation Services2.31.61.422.61.71.56-0.09
Other Services1.93.20.592.53.80.67-0.12
Total Industries1001001.00100100+1.000

Source: National Institute of Economic and Industry Research (NIEIR) ©2024. ©2023. Compiled and presented in economy.id by .id (informed decisions). NIEIR-ID data are adjusted each year, using updated employment estimates. Each release may change previous years’ figures. Learn more

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Dominant groups

A location quotient of greater than 1.2 is generally considered a level of industry specialisation, while a LQ of 0.8 or less indicates an industry which doesn’t have a major presence in the area.

An analysis of employment (total) in the City of Sydney in 2022/23 shows the three industries with the highest location quotient relative to Greater Sydney were:

  • Financial and Insurance Services (2.9 )
  • Professional, Scientific and Technical Services (2.1 )
  • Information Media and Telecommunications (1.8 )

The three industries with the lowest location quotient relative to Greater Sydney were:

  • Wholesale Trade (0.4 )
  • Manufacturing (0.3 )
  • Agriculture, Forestry and Fishing (0.2 )

Emerging groups

Changes in location quotients over time reveal emerging or declining industry specialisations.

The largest changes in the employment (total) LQ between 2008/09 and 2022/23 in the City of Sydney were for these industries:

  • Construction (-0.4)
  • Agriculture, Forestry and Fishing (+0.4)
  • Wholesale Trade (-0.4)
  • Transport, Postal and Warehousing (-0.4)

City of Sydney

economic profile