A Western Australian economic activity index has risen for the tenth consecutive month, pointing towards strong economic growth in the year ahead.
In the latest Genesys Wealth Advisers - Chamber of Commerce and Industry WA economic activity analysis, the index rose by 1.4 per cent in December to reach a record 110 points
The index takes into account seven economic variables including share prices, All Ordinaries index, building approvals, retail trade, business expectations and China's industrial production.
CCIWA said the index is now up by 23 per cent compared to a year earlier and has reached a record high level in each of the past four months.
Driving the index's strong growth from September to December was strong growth in both Chinese industrial production, the local sharemarket and a rebound in business confidence.
"The strong growth in the index during December was largely driven by strong growth in both Chinese industrial production, and the local sharemarket," CCIWA said.
"The continued rebound in business confidence also supported growth in the index during the month.
"By contrast, domestic economic indicators such as building approvals, retail turnover, and the money supply all detracted from growth during the month."
CCIWA chief economist John Nicolau said the WA index is expected to continue to head north for some time.
"The index backs up CCI's economic forecasts which predict steady and strong economic growth from the second half of this year," he said.
"Western Australia's future is bright, however, time is running out for all levels of government to address some of the major capacity constraints which will act as a clamp on growth."