Western Australia continues to grow off the back of the resources sector but the state's economy is being hampered by faltering commodity production and a possible slowdown in Chinese growth, according a peak industry group.
The Chamber of Minerals and Energy of Western Australia said in the June edition of its Resources and Economics report, prepared with KPMG, that cyclonic weather had caused ports to shut down operations thus causing a decrease in production of several commodities including iron ore.
CME Chief Executive Reg Howard-Smith said WA remained the powerhouse of the nation but that the resources sector was facing some challenges.
“Continued speculation on what impact the Greek debt crisis will have on Australia has hit the market pretty hard and particularly affected small and mid-tier miners who are susceptible to these types of jitters,” Mr Howard-Smith said.
“China is expected to remain a big consumer of Australia’s mining exports and a good indicator of that is the monthly crude steel production in China to May this year being higher than the same period in 2011.
“These and other factors support a robust short to medium term outlook for the WA economy, with close to 5 per cent real gross domestic product growth per annum over the next three years.”
The report found that after declining for three quarters of 2011 the average export unit value of iron ore was relatively unchanged for the March 2012 quarter.
During the period 10 major projects were completed including Woodside’s $14.9 billion Pluto LNG operation near Karratha, First Quantum’s work on its Ravensthorpe nickel mine, BHP Billiton’s Mount Keith redesign and Rio Tinto’s Dampier Port expansion.
The report also featured an interview with Chevron Australia Managing Director Roy Krzywosinski into the impact of Chevron’s projects on the wider economy including the Gorgon and Wheatstone projects.
