18/07/2011 - 11:58

CCI tips growth despite low confidence

18/07/2011 - 11:58

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Despite ongoing uncertainty shaking confidence in the global economy, the state's Chamber of Commerce and Industry has tipped the local economy to grow by 6.25 per cent over the next year.

CCI tips growth despite low confidence

Despite ongoing uncertainty shaking confidence in the global economy, the state's Chamber of Commerce and Industry has tipped the local economy to grow by 6.25 per cent over the next year.

CCI Western Australia chief economist John Nicolaou said recent research showed business confidence fell for the third straight quarter in June, with small businesses particularly pessimistic.

Mr Nicolaou said consumers were also cautious, with many believing the patchy conditions will continue in the second half of the year.

Business investment, however, increased over the period, with a record $12.7 billion invested by WA firms in March, largely on the back of continued growth in the resources sector.

"These figures mask the state's multi-speed economy," Mr Nicolaou said. "Many employers are facing challenging conditions, especially small and medium sized firms not linked to the resources sector."

The CCI's quarterly outlook forecast a 6.25 per cent growth outlook for the current financial year, accelerating to 7 per cent in 2012-13, boosted by strong exports and continuation of the resources investment boom.

"Growth will also be aided by increased consumption and a long-awaited housing-led recovery on the back of a growing population, and a more buoyant jobs market," Mr Nicolaou said.

"However the federal government's plans to impose a carbon tax on the Australian economy may limit our ability to realise these forecasts.

"CCI will be undertaking further research to assess how the carbon tax will impact WA business and the local economy."

 

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