Western Australia’s powerhouse economy is yet to hit its peak despite a record $23.1 billion in investment by WA businesses in the March quarter, according to the Chamber of Commerce and Industry WA.
The CCI’s latest WA Economic Report reveals business investment grew by 24.8 per cent over the year to March 2007, driving double-digit growth in domestic economic activity of 10.2 per cent over the period, twice the growth recorded nationally.
With business investment increasing by a further 10.3 per cent in March, WA’s investment growth has now exceeded 20 per cent each year for the past five years.
CCI chief economist John Nicolaou said in a statement that such continued strong growth in business investment had not been expected and would lift the state’s overall economic performance higher for 2006-07.
“Based on the number of large-scale investment projects waiting in the queue, it is likely the current cycle will continue for the foreseeable future,” he said.
The report found that population growth of 2.1 per cent over the year to December 2006, compared with a national increase of 1.4 per cent, had translated to stronger levels of consumer spending and dwelling investment.
Strong interstate and overseas migration to WA will ensure an increase in employment by a solid 2.5 per cent in 2006-07.
Mr Nicolaou said exports would be the key to the continuation of WA’s current economic expansion, and the chamber expected exports to increase by 6.5 per cent over 2006-07.
Exports took a hit in the March quarter, falling 3 per cent as a result of cyclone activity in the state’s north-west.
Gross domestic product, meanwhile, is also expected to continue its impressive performance, building on a record 7 per cent forecast growth in 2006-07 with forecast growth of 6.5 per cent in 2007-08 and 6.25 per cent in 2008-09.
On the national front, the economy is in for a boost of 3.5 per cent in 2007-08 and 2008-09 on the back of solid consumer spending and housing investment, according to the report.
