Western Australia's economy is forecast to grow by 1.5 per cent this financial year while the unemployment rate is tipped to fall to 4 per cent in four years time, according to new forecasts by the state's Chamber of Commerce and Industry says.
In its quarterly outlook for WA released today, CCIWA has revised up its forecasts in areas of economic growth, business investments, household consumption, jobless rate and dwelling investment.
"The local impacts of the global economic slowdown will soon be a distant memory, as Western Australia enters the new decade poised to enter a fresh era of economic growth and prosperity," CCIWA chief economist John Nicolau said.
"Within months, the State has gone from the verge of recession, to now ramping up for growth that will be the envy of the Nation.
"The turnaround in the State's economic fortunes has been impressive."
CCIWA now expects WA's economy to grow by 1.5 per cent in 2009/10, up from previous forecasts of 0.25 per cent.
In 2010/11, WA's economy is then projected to grow 4.25 per cent, then 5 per cent in the following financial year and then a further 6 per cent in 2012/13.
Household consumption is tipped to rise by 3 per cent this financial year, up from the previous forecast of 1.5 per cent, boosted by the strength of the labour market with the jobless rate peaking at 5.7 per cent in September, nine months earlier than expected.
The chamber is now expecting the unemployment rate to average 5 per cent in 2009/10, compared to the previous 5.75 per cent forecast, and will progressively decline to 4 per cent in 2012/13.
"Businesses have entered the New Year looking to hire more people, prompting CCI to declare that the State's unemployment rate has peaked," Mr Nicolau said.
"While the tighter labour market is good news for job hunters, there is growing concern that the severe labour shortages that plagued WA business in recent years will be back.
"One of the biggest challenges likely to face business in this new phase of growth will be finding and retaining the workers they need. "
Meantime, with more than $200 billion worth of major project investments in the pipeline for WA, CCIWA anticipates business investments to fall by 5.25 per cent this financial year, compared to the previous 7 per cent drop.
Business investment is then expected to pick up 7 per cent in 2010/11 and then grow by 9.75 per cent the following year as a result of heavy investment in capacity expansions to service strong global demand.
