Western Australia's economic growth is set to go from “comfortable” to “stellar”, but it won't be as fast as many businesses would like, a new report from Deloitte Access Economics says.
Deloitte's quarterly Business Outlook, released today, highlighted WA and Queensland as the superchargers of the Australian economy, with other states struggling to keep up with the resource states' free-wheeling project pipelines.
But because of slowing population growth and decreasing skilled migration, coupled with more than a quarter of a trillion dollars of investment in the state's pipeline, Deloitte warned WA's rapid economic growth was likely to be marked by negative supply-side issues.
“Policymakers are trying to help around the edges, including via the likes of Enterprise Migration Agreements, and businesses say (they) are working well,” the report said.
“But such is the tsunami of development dollars about to break atop the state that it is hard to see the next few years as being characterised as anything other than severe skill shortages and related cost pressures.”
Deloitte's report said skills and materials shortages, rapid labour turnover and delays in deliveries would result in supply side shortages having a larger negative impact on the state's economy than those of between 2006 and 2008.
Despite Deloitte's warnings, Treasurer Christian Porter lauded the report today, saying it reaffirmed WA as the driving force behind the nation's economy.
“Deloitte pointed to the fact that WA is seeing the planning and implementation of lifelong assets as a sign that the State’s residents will benefit from these planning decisions for years to come,” Mr Porter said.
“Key figures from the report’s economic forecasts showed WA will increase its international exports to a staggering $165billion by 2015-16, with the unemployment rate to hold steady below four per cent from 2012-13 onwards.”
