State growth to record 14pc

Western Australia recorded 14 per cent annual growth in state final demand for the year to June 2006, the highest in Australia and even stronger than that of China.

The seasonally adjusted figures released by the Australian Bureau of Statistics last week highlighted a 5.6 per cent growth for the June quarter in state final demand.

The major contributor to the state’s growth was private and public gross fixed capital formation, which grew seasonally adjusted by 38 per cent (to $8.8 billion) and 17 per cent (to $1.4 billion) respectively for the year to June 2006.

General final consumption expenditure grew 5 per cent to $3.9 billion, while households’ final consumption expenditure grew 17 per cent to $1.4 billion for the year to June 2006.

However, ABS figures showed a 2.2 per cent drop off in the exports of goods for the year to June 2006, to $10.2 billion, while imports continued to grow, from $3.8 billion in June 2005 to $5.4 billion in June 2006.

Treasurer Eric Ripper said the growth figures highlighted the state’s domestic economy was the fastest growing in the nation.

“Based on the latest data, our economy is now growing even faster than China’s [which is at 11.3 per cent],” he said.

“Without WA, the rest of Australia would be struggling.”

In comparison, domestic final demand grew 3.8 per cent from June 2005 to June 2006.

The growth in WA’s final demand for the year to June 2006 was 6.7 per cent higher than second placed Queensland on 7.3 per cent, while the Australian Capital Territory received a growth rate of 5.2 per cent.

Tasmania grew at 3.5 per cent, while New South Wales and Victoria grew at just 1.1 per cent and South Australia 0.5 per cent in the 12 months to June.

Mr Ripper said the figures showed the state’s domestic economy was largely being driven by a 51.2 per cent rise in business investment.

The 14 per cent growth figure is considerably higher than the estimated actual state final demand growth of 6.75 per cent presented in the 2006-07 Budget Economic and Fiscal Outlook.

Meanwhile, Australian building approvals rose a seasonally adjusted 8.3 per cent to 14,288 units in July, from an upwardly revised 13,199 units in June. In the year to July, building approvals rose 9.1 per cent.

Total dwelling units approved grew 25 per cent seasonally adjusted in July from the previous month, representing 2,636 total dwelling units approved. Private sector housing only increased 0.2 per cent in July to 1,746 dwellings approved.

On a trend-estimate basis, total dwelling units approved in WA has been flat for the past six months. The trend for private sector houses is now showing falls for the past three months.