Population growth remains high as investment drops

The transition of the Western Australian economy is under way amid strong population growth, according to recent research from the Committee for Perth.

The committee's snapshot of the state’s economy found WA has experienced significant growth in its labour force this year, with employment rising by 5,200 (0.4 per cent) to 1.36 million in June 2014, with year-on-year growth of 38,900 (1.7 per cent).

Employment growth at this level is well above the national average of 0.9 per cent, year-on-year.

But unemployment also rose to 5.2 per cent in August, with a participation rate unchanged at 68.4 per cent.

The factors driving simultaneous increases in both unemployment and employment are population growth and demographic change, with population growth estimated to be 2.6 per cent for the 2014 financial year.

The state’s share of the national population was 10.9 per cent in December 2013, while for the 2012-13 financial year, WA’s gross state product was $243 billion, about 16 per cent of Australia’s total production.

That means gross state product per capita is more than $98,000, dramatically (48 per cent) greater than the national average of $66,400.

The committee says business investment is projected to have fallen 7.5 per cent for 2013-14, while merchandise exports were up 7 per cent.

Merchandise exports are expected to continue to grow at this rate for the next few years, as business investment continues to fall.

Services performed strongly, with education travel exports up 7 per cent and professional and management consulting service exports increasing 52 per cent, to $149 million.