Western Australia’s strong economic growth is set to continue, driven by increased consumer spending according to the state’s peak industry group.
The Chamber of Commerce and Industry WA has forecast growth of 6.5 per cent per annum over the next two years in its latest quarterly economic outlook.
Consumer spending is tipped to rise by 5.75 per cent in 2012-13 and by a further five per cent the following year, following early signs of rebounding confidence.
“The housing market is particularly likely to benefit from this shift in consumer sentiment in the second half of this year,” CCI chief economist John Nicolaou said.
“A combination of a stronger population, low interest rates, higher rents and improved financial positions mean consumers are more likely to enter the market.”
Household consumption was the key driver of growth in the year to December 2012, Mr Nicolaou said, increasing by almost seven per cent over the year.
With the United States managing to avert its “fiscal cliff” early this year and signs of strength in the Chinese economy, there was less global uncertainty and therefore greater consumer confidence.
Business investment is forecast to increase by 15 per cent in 2012-13 before dropping to 5 per cent in 2013-14, with the number of new projects moving into the construction phase in the resources sector set to decline. However, Mr Nicolaou said the investment pipeline was “still very healthy”.
Treasurer Troy Buswell said the CCI outlook was further confirmation that WA’s economy was the strongest in the nation, following similarly bullish forecasts from CommSec and Deloitte Access Economics earlier in the week.
“Our recent growth and projections of future growth are the envy of any developed economy and coupled with the lowest unemployment rate in the country, it is no wonder we have an unprecedented rate of people moving to this great state,” he said in a statement.
