There are signs Western Australia is well-placed to be one of the first states to come out from the global recession, with economists revealing there are early indications that the economy is about to recover.
There are signs Western Australia is well-placed to be one of the first states to come out from the global recession, with economists revealing there are early indications that the economy is about to recover.
Below is the announcement:
The Western Australian economy enters the new financial year well placed to be one of the first to emerge from the current global recession, with hopes rising that the economy may soon turn the corner.
The State's peak business organisation, the Chamber of Commerce and Industry of Western Australia, has today released its quarterly snapshot of the local, national and international economies, which reveals there are early signs of an economic recovery.
The past year will be remembered as a period in which the local economy showed surprising resilience amidst the steepest global economic downturn in history.
Looking forward, the next 12 months will be a year of consolidation as businesses big and small from across the State look to the future with increasing confidence, and prepare for the next upturn.
Despite the local impacts of the global recession continuing to be felt across the economy, Western Australia remains one of the world's few economies that grew in 2008-09. Growth is for the financial year just ended is expected to reach 3 per cent, driven by strong economic activity in the first six months of the year.
The next 12 months will remain difficult with the WA economy expected to contract by one per cent in 2009-10, which would have been a mild recession by global standards.
Over the medium term, the prospects for the local economy remain positive.
Recent surveys conducted by CCI measuring consumer and business confidence show that Western Australians are becoming increasingly upbeat about the prospects for the local economy. There is a renewed appetite among some businesses to expand their operations, and many consumers believe now is a good time to buy.
CCI predicts the WA economy will grow by 4½ per cent in 2010 11 and by 5½ per cent in 2011 12, bolstered by stronger conditions overseas and renewed demand for WA exports.
Despite the softening conditions, the State's labour market has shown surprising resilience. After years of chronic labour shortages, businesses have adopted a range of measures, such as reducing working hours, to avoid standing down staff.
Despite the best efforts of business, the number of Western Australians looking for work continues to rise. The unemployment rate is tipped to peak at six per cent during 2009-10.
However, Western Australia is not immune from the global recession. Business investment has fallen to its lowest annual rate of growth in four years. Yet it remains stronger compared to the same time last year, as businesses continue to work through the backlog of construction activity.
This slowdown saw the WA domestic economy shrink by just over two per cent during the first three months of 2009. It is the first contraction of the local economy in two and a half years.
Nationally, economic conditions have also deteriorated across Australia. Despite this, the economy managed to record positive growth in March, and therefore avoiding a technical recession.
The better than expected result for the national economy reflects a strong external sector, with the Nation's trade deficit shrinking to its smallest level in two and a half years.
There are early signs that the worst of the downturn may be coming to an end. The rate at which economic conditions are deteriorating around the world has eased, while forward looking indicators in the United States, Japan and China have started to improve, providing an early indication that the worst recession in 75 years may be starting to subside.
In Japan, industrial production recently recorded its largest quarterly increase in more than 55 years. Consumers are increasingly optimistic about the prospects for the economy in the year ahead.
Positive signs are also emerging in China, with manufacturing increasing for the past four months, and imports of raw materials are growing strongly.
Global financial stability is also improving, led by coordinated efforts by central banks around the world to cut interest rates, increase liquidity and support key financial institutions.
A recovery in the global economy is still some way off, with economic conditions around the world expected to remain subdued in the near term. This will have implications for the speed at which Western Australia emerges from the global slowdown.
