The signs are positive that economic activity and growth in WA will continue to lead the way over other States. Gary Kleyn reports.
WESTERN Australia appears to have everything going for it. Overall, the economic indicators continue to defy gravity while the export sector, with the recent shot in the arm from the $25 billion LNG deal with China, continues to perform solidly.
The optimistic outlook is reflected in strong consumption and investment numbers and steady growth in construction activity.
Figures just released by the Australian Bureau of Statistics show WA’s real domestic demand increase for December 2002 rose 5.5 per cent over the December quarter to stand 8.4 per cent higher than in December 2001.
Business investment was the key driver, rising 16.4 per cent over the December quarter and by 20.3 per cent through the year. Some of this increase was due to government spending, which rose 9.5 per cent during the quarter.
And the cranes now dotting the Perth skyline provide an obvious pointer toward business optimism in WA’s future.
An ABS study into prospects for Australia’s regional economies between September 2002 and 2010 found that WA had the highest growth potential, while Tasmania had the lowest. And that is without taking into account growing government subsidies and funding programs.
Perth topped the regional ranking Australia-wide, followed by Peel, with forecast average annual growth rates of 4.7 per cent and 4.6 per cent respectively.
In fact, all of the top five growth regions in Australia are in WA. Ranked third is the Gascoyne, followed by the Great Southern, then the South West. The Kimberley, with expected average annual growth of 4 per cent, is in eighth position.
The regions with the weakest prospects are Mid-West, Wheatbelt and Goldfields-Esperance.
WA has good reason to be buoyant about the future, according to research by the Monash University Centre of Political Studies. The centre’s work indicates WA has all the hallmarks of an economy with the momentum to grow faster than any other State in Australia over the next decade.
Explaining the Monash findings, published in the December issue of the National Business Bulletin, Centre of Political Studies director, consulting, Philip Adams said Perth’s most obvious strengths were the absence of slow-growing agricultural and mining industries, and an over-representation of fast-growing service industries.
While the Peel region had similar advantages to Perth, it had an under-representation of financial and business services, Dr Adams said. Peel also had an over-representation of black coal electricity generation, which has comparatively weak growth prospects.
Likewise, the Goldfields-Esperance region is weakened by its high reliance on mining and agriculture.
The Wheatbelt is also underdeveloped beyond agricultural production, Dr Adams says. The Mid-West and the Pilbara have the poorest prospects, and Dr Adams believes the Pilbara suffers from an over-representation of slow-growing iron ore.
All other regions have prospects slightly better than average.
“Kimberley’s economy benefits from comparatively good prospects assumed for its agricultural industries, particularly those centred on the Ord River scheme,” Dr Adams says in his report.
“The Gascoyne and Great Southern regions benefit from being under-represented in slow-growing agriculture and mining and over-represented in comparatively fast-growing service industries.
“The South West has a mix of industries similar to the WA-wide mix. Accordingly, its growth prospects are close to the growth prospects of the State as a whole.”
Dr Adams believes there are five characteristics of high-growth regions.
p They are positioned within a high-growth State and thus benefit from strong growth in trade within the State.
p They generally have a solid secondary-production base covering a diversified range of manufacturing and service industries.
p They have natural advantages in one or more areas such as tourism attraction and a large population base.
p They make efficient and sustainable use of natural resources.
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.