Geelong's Business Growth Faces Headwinds Despite Strong Employment and Property Demand

Geelong's economy is showing strong momentum, with projections of 34,000 new jobs over the next five years and a surge in commercial property demand. However, business owners and investors are grappling with rising rents, supply chain uncertainties, and a competitive property market that is reshaping the city's commercial landscape.

Strong Employment and Spending Data

Central Geelong recorded $944 million in consumer spending last year, edging closer to the $1 billion mark, according to local economic reports. The city also saw 3.5 per cent growth in registered businesses, with nearly 800 new operations launched. This uptick is driven partly by a manufacturing comeback and supply chain uncertainties that are boosting local production.

Yet these positive figures mask underlying pressures. The same supply chain disruptions that are fuelling local manufacturing are also creating cost pressures for businesses. Rising input costs and logistics delays remain key headwinds, particularly for smaller operators that lack the scale to absorb price increases.

Commercial Property Market Tightens

The commercial property sector is a particular focus for businesses in Geelong. The building at 60 Moorabool Street in the CBD has reached 100 per cent occupancy, with recent leasing agreements from tenants including GMHBA, IAG, and WorkSafe. That level of demand is driving up rents and reducing available premium office space.

Interstate investors from Melbourne and Sydney are increasingly targeting Geelong's commercial property sector. At the same time, small and medium-sized enterprises are shifting from leasing to buying premises, locked out of the leasing market by rising rents and scarcity of high-quality space. This trend is intensifying competition for available properties and putting upward pressure on prices.

Manufacturing Recognised, But Pressures Remain

Two local businesses, Hanlon Industries and Farm Foods, were named Manufacturer of the Year at the Victorian Manufacturing Hall of Fame Awards, highlighting Geelong's success in a state manufacturing industry valued at $33.5 billion. The recognition underscores the city's strength in advanced manufacturing and food processing.

However, the manufacturing sector faces sustained headwinds from rising energy costs, skilled labour shortages, and global supply chain volatility. While the push for local production is creating opportunities, businesses must navigate a complex operating environment that includes higher input costs and margin compression.

Industry observers note that the city's business community is adapting by diversifying supply chains, investing in automation, and exploring new export markets. But the path forward is not without risk, particularly for SMEs that lack the financial buffers of larger corporations.

Looking Ahead

Geelong's economic outlook remains positive, with strong job creation and business formation supporting growth. Yet the challenges of rising rents, supply chain pressures, and a tightening property market will continue to test local businesses. The ability of SMEs to adapt to these conditions will determine whether the city's momentum can be sustained over the longer term.

For now, the message from the data is clear: Geelong is growing, but the cost of doing business is rising alongside it. Business owners must remain agile to navigate the headwinds ahead.