Southern Grampians Shire is located along the Great South Coast in Victoria’s South-West, with the largest centre at Hamilton, about 270 kilometres from Melbourne. Other centres in the Shire include Coleraine, Penshurst, Dunkeld, Balmoral and Glenthompson.

The Shire's agricultural base is heavily concentrated around wool production and fat lambs, with Hamilton known as 'The wool capital of the world'. Beef cattle and forestry are also important primary employers, with the latter industry set to grow substantially in the next five to ten years.

Most manufacturing jobs in the Shire are associated with primary production, with machinery and equipment fabrication the most notable employer. The largest share of the population is employed in services, most notably retail trade, education and health. Tourism is also a notable employer in Southern Grampians Shire, especially around Hamilton and Dunkeld to service Grampians-based tourism. The Shire is relatively self-contained in employment terms and as a consequence future changes to population will be associated with employment growth or decrease.

The population of Southern Grampians Shire was relatively stable during the late 1970s and early 1980s, but has declined substantially since 1986. The greatest period of population loss was during the 1991-1996 period. This followed a significant drop in the value of wool and the removal of a guaranteed price for the commodity. There were comparatively minor losses between 1996 and 2001. Since 2001, there is significant evidence to suggest that the population decline has stabilised. The dominant drivers for population loss during these periods were:

• loss of young people (18-24 years) to major centres, such as Melbourne, Warrnambool and Geelong.
• consolidation of farming enterprises producing out-migration of persons, most notably in the dry-land farming areas
• loss of employment in other key industries such as the government administration and utilities

The dominant drivers for population gain during these periods have been:

• employment growth in services, especially tourism based industries, retail trade, health and education
• Consolidation of agricultural industries and growth in value-adding
• Attraction of families to the area, based on the amenity and beauty

The population gains tend to be based on external migration factors, such as from overseas and to a lesser extent neighbouring rural areas to Hamilton. It is assumed that a number of these patterns will continue into the future, most notably flows into the Shire from overseas and losses of young people to larger centres, albeit in lower numbers. It is likely that this may result in a bit of a reversal with Southern Grampians Shire gaining from Metropolitan Melbourne, as new employment opportunities are created.

Migration flows, Southern Grampians Shire, 1996 to 2001.

The population change expected over the next fifteen to twenty years will also be influenced by demand for housing in those areas. The Hamilton areas are advantaged by their proximity to a broad mix of education, retail and health services. There is not likely to be a major constraint on supply in any of the Hamilton areas (North, South or East) over the next fifteen to twenty years, although Hamilton (North) and Hamilton (East) should see the bulk of dwelling increase as a result of developer interest and the bulk of rural residential land falling in the Hamilton (North) area. Coleraine - Rural West is likley to benefit from proximity to future employment growth in the timber industry, although some of this growth is likely to express itself in Glenelg Shire, parts of South Australia, notably Penola and Mount Gambier and Hamilton where better services are available. The rural areas more distant from Hamilton are likely to continue to decrease in population, as the overall size of farms continues to increase and land is lost to timber production.