The ad industry is another reason the NSW and Victorian economies are so much stronger than the rest of Australia

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While Western Australia struggles under the weight of a collapsing mining boom New South Wales and Victoria continue to be the standouts in terms of growth, both realised and potential.

Naturally, a large part of that divergent economic outlook is because of the service-based nature of Australia’s two most-populous states. And it is services which are driving the economy forward, as the latest update of the NAB’s business survey showed this week.

Research from the Communications Council shows that of the estimated $40 billion of annual contribution to Australian growth derived from the advertising industry, around $26 billion is captured in New South Wales and Victoria.

The report, Advertising Pays, was commissioned by the Communications Council and produced by Deloitte Access Economics. It shows that direct advertising spend accounts for around $12.6 billion or roughly 1% of Australia’s annual gross domestic product.

Jaimes Leggett, Chair of The Communications Council and CEO of M&C Saatchi Group Australasia, said “as the commodities market softens, it’s encouraging to see our services industry has a solid role in bolstering the broader economy.

“It’s clear from this research that an investment in advertising helps to drive the Australian economy further,” Leggett added.

To that end, the report also estimated 200,000 Australian are either directly or indirectly employed as a result of advertising.

Deloitte estimates this calculation as one person in the advertising supply chain for every one of the 55,903 people directly employed in advertising as at May 2015 with “two additional people employed in supported sectors and occupations, for every one person employed in advertising.”

Once again it is New South Wales and Victoria which take the lion’s share of employment.

But creativity is not something that either Sydney or Melbourne have a lock on.

So the very technological changes that are revolutionising the way Australian’s access content, and as a result encounter ads, also allows for the ultimate decentralisation of the industry. That’s not only outside the two main centres of Sydney and Melbourne but also the states of News South Wales and Victoria themselves.

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