The state’s peak business body and Premier Colin Barnett have taken opposite views on where the state’s economy is headed, as the global economic uncertainty continues to provide mixed signals for investors.
Mr Barnett today shot down the Chamber of Commerce and Industry’s growth forecast for Western Australia, which flagged 6.5 per cent growth over 2011-12, and a further 7 per cent in 2012-13.
The Premier specifically said the boom times were over.
"I believe the West Australian economy will typically grow in the range of about four to six per cent," Mr Barnett told reporters today.
"The state is experiencing strong growth, but the component of growth that is driving those figures is investment income and export income.
"So that doesn't necessarily translate across the economy ... that is not a growth rate of seven per cent across the economy.
"There is still weakness in the retail sector."
Mr Barnett said although WA was still driving the national economy through strong commodities exports, it was no longer a boom state.
"We haven't got a boom," he said.
"If we had a boom, we wouldn't have rising unemployment and large loss of jobs on the east coast.
"Many in the small business sector, companies in this state, are doing it very, very tough at the moment - that is not a boom condition."
Mr Barnett also warned a wages outbreak would crimp major investment in the mining state.
The CCI is predicting wages growth of 7.25 per cent in WA this financial year.
"A wage growth like that would slow down investment in major projects, so that's not something that you will see within government and I wouldn't want to see it in the private sector," Mr Barnett said.
The CCI’s view was that WA is well placed to ride out the current global uncertainty on the back of the dominant resources sector.
Chamber of Commerce and Industry WA chief economist John Nicolaou said the state’s close ties with Asia and the vast range of major resources projects under way should see the economy grow by 6.5 per cent over 2011-12, and a further 7 per cent in 2012-13.
Mr Nicolaou, however, warned the state was not immune from global conditions.
“Weak business and consumer confidence is still a factor and if it continues it’s likely to see the multi-speed economy remain a feature for longer than initially expected,” he said.
Mr Nicolaou said while the CCI’s outlook for WA remained very positive, that could be revised by the precise inflationary impacts of the carbon tax, which are still unknown, and any affect the global slowdown might have on Asian trading partners.
“While markets are currently pricing in an interest rate cut by the end of the year, there would need to be a significant deterioration in the global outlook and a further moderation in inflation for this to eventuate,” he said.