Western Australia's Chamber of Commerce and Industry says despite growth returning to pre-GFC levels, there are further signs that the state's economy is moving at two speeds.
Western Australia's Chamber of Commerce and Industry says despite growth returning to pre-GFC levels, there are further signs that the state's economy is moving at two speeds.
Western Australia's Chamber of Commerce and Industry says despite growth returning to pre-GFC levels, there are further signs that the state's economy is moving at two speeds.
The chamber's quarterly analysis of local, national and international economies showed the WA domestic economy grew by 6.5 per cent over the year to September 2010, but CCI chief economist John Nicolaou said that growth masked the challenges facing a large number of businesses.
"Consumer facing sectors are still doing it tough," Mr Nicolaou said.
"Household spending has eased in recent months, as rising interest rates and living costs have made people more cautious with money."
That uncertainty among consumers, Mr Nicolaou said, has translated into a sluggish housing market and falling prices.
"However, it is likely that stable interest rates, a rising population and strong labour market conditions will bring about higher levels of activity through 2011.
While conditions seem patchy at the moment, Mr Nicolaou said the WA economy was gaining momentum.
The chamber has tipped economic growth to peak at 6.25 per cent in 2012-13, boosted by significant levels of investment activity and higher export returns.
Mr Nicolaou said the already tight local labour market was only set to tighten further as growth ramps up.
"Businesses are worried they won't be able to get the workers they need," he said.
"One third of employers are already describing labour as 'scarce' and 40 per cent of businesses expect it to worsen by March.
"This is one of the biggest risks for the local economy and urgent action is needed by state and federal governments to lift participation and productivity to grow the workforce.
"Doing so will further unlock the potential in the WA economy."