Perth economy leads regions

02/04/2008 - 22:00

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The mining sector, the small business sector and the regions all claim from time to time to be the powerhouse of Western Australia’s economy, and they will all find evidence to back up their claims in a new research report prepared by the Chamber of Comme

Perth economy leads regions

The mining sector, the small business sector and the regions all claim from time to time to be the powerhouse of Western Australia’s economy, and they will all find evidence to back up their claims in a new research report prepared by the Chamber of Commerce and Industry WA.

The CCI’s ‘Profile of WA Business’ found that the state has 204,750 businesses, with the regions home to 57,684 businesses, or 28 per cent of the total.

The state’s economic output, as measured by gross state product, was worth $118.6 billion in 2005- 06 – the regions contributed $38 billion, or 32 per cent of this total.

The resources sector is listed as the state’s single largest industry, with output worth $38.8 billion in 2006-07 and nearly 52,000 workers.

At first glance, that suggests mining and resources account for the entire economic output of regional WA.

However, this is where economic statistics start to get complicated, as a closer look at the Pilbara region illustrates.

Pilbara miners generated annual output worth $28.5 billion in 2005-06 – this figure would have increased substantially in the past two years as a result of big expansion projects and higher iron ore prices – while the petroleum sector generated output worth $10 billion, including crude oil and liquefied natural gas.

However, the Pilbara’s gross regional product in 2005-06 was only $6.8 billion, or 5.7 per cent of the state total.

The big difference arises because gross regional product – like gross state product for WA and gross domestic product for Australia – is a measure of value add.

It is based on output minus costs of production.

If gross state product is the preferred measure of economic activity, then the Perth metropolitan region dominates the state.

Perth’s output is valued at $80.6 billion, or nearly 68 per cent of gross state product, and it is home to 146,000 businesses, or 72 per cent of all businesses.

The major industries in Perth are categorised as property and business services (39,000 businesses), construction (27,340), retail trade (15,760) and finance and insurance (12,300), followed by health and community services and education.

The majority of businesses (around 61 per cent) operating in Perth are non-employing.

Of the remainder, small businesses account for 89 per cent of all employing businesses while medium and large businesses collectively account for 11 per cent.

The state’s second largest region is the South West, which is home to 141,670 residents and 14,500 businesses, or 7 per cent of the state’s total.

The region’s output was worth $7.9 billion or 6.7 per cent of the WA economy.

The biggest contributors to the region’s economy are manufacturing – it is home to 790 manufacturing businesses – and mining and minerals processing.

Specifically, this includes bauxite mining and alumina production at Worsley Alumina, near Collie, coal production at Collie and mineral sands mining.

The state’s third largest region is Goldfields Esperance, which accounts for 6.1 per cent of gross state product.

The biggest contributors are the 280 mining businesses operating in the region.

The Goldfields also has a large manufacturing sector, courtesy of the Kambalda nickel smelter.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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