The state’s leading business group says confidence in the local economy remains on edge, and any significant shift in sentiment could have a negative impact on growth, despite new research suggesting the WA economy remains on the upswing.
The Chamber of Commerce and Industry WA and Westpac Leading Index of WA Economic Activity notched up its ninth consecutive month of growth in March, growing by 1.2 per cent.
Year-on-year, the index was up by 4.5 per cent compared to the same time last year.
CCI WA chief economist John Nicolaou said the growth in the index over the past nine months reflected the recent improvements in consumer and business confidence and the impact they had on spending and investment decisions.
“However, confidence remains fragile and any significant shift in sentiment would likely impact on the performance of the index in coming months,” Mr Nicolaou said in a statement.
Drivers behind the growth in March were largely domestic, with lending finance up 3.4 per cent in the month, building approvals rising by 2.1 per cent, and small business spending intentions increasing 3.1 per cent.
The CCI said other sectors of the economy were experiencing challenging conditions, however, with retail sales growth sliding and softer labour market conditions detracting from the index.
The index is calculated by combining and analysing seven leading economic variables to predict cyclical turning points in the WA economy.