Western Australia continues to thrive, with the local economy growing faster than any other state in Australia.
Rankings released by CommSec, the sharetrading subsidiary of the Commonwealth Bank, named Western Australia as the country’s best performing economy.
The Western Australian economy is powering along thanks to ongoing Chinese demand for resources, and the state is not expected to be knocked off its perch in the near future.
The next three years will be stronger than previously thought, rising to 4.5 per cent in 2010-11, 5.5 per cent in 2011-12 and 6.25 per cent in 2012-13, according to a report released by the Chamber of Commerce and Industry. This figure is much higher than previously expected.
Economists are surprised and are scrambling to update their growth forecasts as companies dust off their expansion plans sooner than expected after a downturn that had threatened to send the resource-dependent state into a deep recession.
The West Australian Chamber of Commerce and Industry announced that it has ramped up its economic growth forecasts for the state for the second time in just three months.
Western Australia is getting income from the economic growth made by local businesses, with investment improving and looks to expand in the favorable economic climate.
There is a big increase in consumer spending, as households feel more confident about splashing out on ‘non-essential’ items like new cars, meals and consumer electronics.
“Western Australia’s prospects were the strongest of any Australian jurisdiction”, says CommSec chief economist Craig James. “Western Australia still appears to have the best prospect of all the states and territories, benefiting from strong demand for resources, especially from China, and, more broadly, Asia”.
The Chamber of Commerce & Industry reported that business investment is expected to grow by 7 % in 2010-11, picking up to 9.75 % in 2011-12 and 12 % in 2012-13 as construction begins on planned projects worth up to $200bn. Its previous forecast of a 5.25 % contraction in business investment in 2009-10 has been revised up to a 2 % contraction, reflecting the rapid turnaround in business confidence.
The mega-projects on the way in the state include the $43bn Gorgon liquefied natural gas development on Barrow Island, where early construction has begun, and Woodside’s Pluto gas project near Karratha, which is to start exporting early next year.
The Chamber of Commerce & Industry has also lifted its forecast for exports given that demand has remained “surprisingly strong” during the downturn.
Exports grow this year with volumes holding up and commodity prices beginning to rise, as opposed to its earlier forecast.
But the impact of the slowdown is still being felt in employment, which is expected to grow by just 0.25% during 2009-10.
The unemployment rate in Western Australia is also going down, in fact it was 5.7% in the last quarter of 2009, and now it is expected to drop 3% by the end of 2012/13.
“With the booming Western Australian economy, it is essential that skills requirements are met in order to avoid a massive skills shortage”, commented by the Western Australian Business News.
