Karratha adjusts to its new ‘normal’

The transition of the Karratha economy away from its reliance on big construction jobs for resources projects has resulted in thousands of job losses.

However, the future is still bright for Australia’s sixth-largest economy, defined by local government areas, according to business and industry leaders.

Karratha and District Chamber of Commerce and Industry chief executive John Lally told Business News a slowdown in major construction jobs had led many fly-in, fly-out workers to leave the town, while locally based workers were either looking for work or had moved on to smaller projects.

Unemployment rates have more than tripled from very low levels of just over 1 per cent in 2012.

“Thousands of people are looking for work now,” Mr Lally said.

Local construction jobs either under way or soon to start include the $140 million commercial development Quarter, Yara Pilbara’s $US800 million ammonium nitrate plant, an $11 million GP super clinic, $207 million hospital, and the $18 million Dampier community hub.

LandCorp chief operating officer Nic Wolff said the state land developer had come up with a new initiative to create more work for smaller, regional construction firms and their local employees.

“Where possible, where we can break up bigger parcels of work into smaller packages in the sub-$7 million category, we are doing that,” he said. “It’s certainly been well regarded that we are able to spread the work.”

There has also been a renewed push to attract and develop other industries.

City of Karratha Mayor Peter Long said the council was confident Karratha would continue to have a strong local economy and job market in the long term.

To guide major future investment, a proposed blueprint will be released later this month for public comment. “There is still significant investment occurring in our city,” Mr Long said.

Mr Lally said schools had welcomed about 400 new students in February on December numbers as more families moved to the area as a result of improved housing affordability. “People can afford to live here now,” he said.

Pilbara Development Commission acting chief executive Terry Hill said the average weekly rental in Karratha was now around $800, down from peaks of $1,800 in late 2011.

The average settlement price for Karratha homes, as recorded in the December 2014 quarter, has fallen to $453,000, down from a peak of $1.1 million four years ago and an average price of $686,000 in March 2014.

Across the Pilbara in the commercial space, September 2014 quarter figures showed more retail and industrial places were up for lease, and for lower prices.

The advertised price to lease office space increased, from $502 per square metre, to $529.

“High land prices and labour costs are starting to normalise so there’s an opportunity for growth in small businesses,” Mr Hill said.

“The Pilbara has opportunities for new businesses leveraging off the competitive advantages of the region – like renewable energy, using mine dewatering to grow agriculture, and tourism.”