WA mining boom to return after few years

Substantial growth in the state is projected to return in the medium to long term following a decline in demand over the next few years, a new study has revealed.

The joint industry-government study commissioned by CME provides an integrated view of industry and government development plans for the minerals and energy sector.

It also creates an outlook for growth in Western Australia, focussing on the key growth enablers of water, people and energy.

"The Study develops scenarios rather than forecasts but the underlying message is clear - the State's growth trajectory out to 2020 will be positive," said CME chief executive Reg Howard-Smith.

"Results of the Study suggest the current financial crisis will cause a decline in general demand over the next few years, followed by a recovery period with rapid growth set to resume in the early part of the next decade," Mr Howard-Smith said.

The study examines three possible scenarios on the demand for labour, electricity, domestic natural gas and water.

The global financial crisis is the gauge for each scenario with projections made for before the economic downturn, the softer impact of the crisis and a longer lasting impact of the economic volatility.

Under scenario one, the CME projects demand for labour to grow at an annual rate of 7 per cent to 27,000 by 2014.

"The highest growth regions are expected to be Mid West, Goldfields/Esperance and the Pilbara, with respective incremental demands for people of 60,000, 3,000, and 14,000 in 2014 over 2007 levels," the CME said.

Under scenario two, CME projects a sharp upturn in demand in 2011 and incremental demand to rise to 38,000 in 2012 while scenario three expects demand to reach 17,500 in the same year.

"The unprecedented growth experienced by Western Australia up until late 2008 resulted in increased pressure on many aspects of the State such as labour, water, energy, civil infrastructure and housing," Mr Howard-Smith said.

"The current economic climate provides the time required to plan and prepare for the challenges of the next wave of growth.

"It is essential that this time is used effectively to improve management of growth, better infrastructure planning, coordination and delivery, and workforce planning.

"The greatest threat to sustained development in Western Australia is the absence of a vision for growth.

It is also vital the Government policy settings facilitate development and remove uncertainty, particularly in the areas of approvals, emissions trading, taxation revenue, land access and protectionism, Mr Howard-Smith said.