The Chamber of Commerce and Industry of WA has expressed concern that the fundamental strength of the local economy is being undermined by uncertainty and pessimism.
The Chamber of Commerce and Industry of WA has expressed concern that the fundamental strength of the local economy is being undermined by uncertainty and pessimism.
Full announcement below:
Common sense needed to help WA withstand the global financial crisis
Statement by CCI Chief Economist John Nicolaou
There is no doubt the current financial crisis is having a significant affect on the global economy, however ongoing speculation about its impact on the Western Australian economy could unnecessarily damage business and investor confidence.
The State's peak business organisation, the Chamber of Commerce and Industry of Western Australia, is concerned the many strengths of the WA economy have been overshadowed by uncertainty and pessimism.
CCI remains positive about the outlook for the Western Australian economy, which it estimates will continue to grow more strongly than the rest of the Nation.
It is important that business and households take a pragmatic view of the WA economy to avoid the risk of talking ourselves into an avoidable prolonged downturn. During times of uncertainty, we need to focus on our many strengths, not our few potential weaknesses.
There are a number of forgotten facts about the WA economy which demonstrate its ability to withstand the global downturn. They are:
- Fundamentally strong economy - the WA economy remains the economic powerhouse of the Nation. CCI predicts the economy will continue to grow strongly across a broad range of sectors.
- Low unemployment - since the start of the financial year almost 40,000 new jobs have been created, and in October WA's unemployment rate dropped to 2.2 per cent, a 34 year low.
- Strong banking sector - Australia's banks are among the best managed and operated in the world.
- Growing population - Western Australia has the fastest growing population in the nation, with around 1,000 people moving to the State every week, which will ensure growth remains strong throughout the economy, especially the housing and retail sectors.
- New investment - there remains about $170 billion worth of investment projects either committed to or in the pipeline in Western Australia. $63 billion of that amount is already committed to or under construction. Several major mining companies are proceeding with significant expansion projects.
- Interest rates - recent rate cuts by the Reserve Bank will stimulate the local economy and boost business and consumer confidence.
- Stimulus packages - Australia, and in particular Western Australia, stands to benefit from the Chinese government's $870 billion domestic spending package on new infrastructure. These projects will require vast quantities of WA's resources. Asia and China will help insulate WA from the worst of the crisis.
The Australian Government's $10.4 billion assistance package should act as a stimulus for the retail and housing sectors.
While no developed economy is immune from the global financial uncertainty, Western Australia is better placed than most to withstand any slowdown.
Of all the industrialised economies, Australia is probably the best placed; of all the States in Australia, right now WA is the place to be.
Despite the short term uncertainty, it remains important for business, industry and households to keep sight of their long term goals and Western Australia's positive economic outlook.
