Chamber of Commerce and Industry chief executive John Langoulant has forecast a steadying of Western Australia’s economy and the property market as industry catches up on a backlog of work.
Chamber of Commerce and Industry chief executive John Langoulant has forecast a steadying of Western Australia’s economy and the property market as industry catches up on a backlog of work.
Citing the past two years as the strongest-ever period of economic growth, Mr Langoulant warned that capacity restraints would hinder similar gains over the next year.
“I expect business investment to stay very strong, but not at the same growth rates of recent times,” Mr Langoulant said.
“The WA economy has gone through an exceptional growth period, and simply can’t continue to grow at the same rates.
“Activity levels will stay strong, but just ease off. We are not expecting them to drop.
“Even if the economy stopped growing today, it would still take a substantial period of time to unwind.”
Skills shortages across all sectors in the state is of major concern, and avenues to address the problem need to be looked at with great urgency, according to Mr Langoulant.
“We have not seen growth or demand like we have now, and there needs to be a great focus of policy to deal with these upswings,” he said.
“Government and business need to get into the apprentice issue more strongly.”
Among possible strategies are: attracting more young people into trades; making it possible to do apprenticeships quicker; and looking offshore for labour.
Addressing the Property Council’s recent commercial property conference, Mr Langoulant said the property sector was giving mixed signals.
“There has been an easing in dwelling approvals, but finance approvals have been holding their own,” he told the conference. “The dwelling sector has been very good in recent years, and it will continue to have good times for a lot longer than the east coast.
“We forecast activity to ease over the next two years, but not in a significant way.
“We are simply coming off a level of activity that is so high that it cannot be continued.”
Although the outlook for the next two years is positive, Mr Langoulant also warned that there were certain risks in a stable economy.
“The challenge for businesses in a situation like this is resource management,” he said.
“Inflation is a real concern, as is the industrial relations environment.
“The monetary authorities have done an extraordinary job of managing inflation, but as certain as night follows day, the bad times will be upon us in the future.”
Mr Langoulant said that, while the global outlook was for an easing in growth rates, China’s growth would have more impact on WA than the global economy.
“For WA, China is the economy to watch. Their rapid growth is good news, but needs to be carefully watched,” Mr Langoulant said.
