The state’s peak business body has tipped the state's two-speed economy to become more pronounced, with conditions outside of the resources sector to get more challenging as business investment continues to contract.
The Chamber of Commerce and Industry WA today reported the sharpest monthly decline in its economic activity index since December 2008, a third consecutive month of falls.
The Westpac-CCI Leading Index of WA Economic Activity fell by 1.8 per cent in June, slipping to a ten-month low.
The chamber said weaker business investment, falling building approvals, and a slowing trend in lending finance all weighed on the index.
Other factors leading the index down were drop offs in Chinese steel production and US consumption.
“The recent falls in the Index shows that the next six months will remain uncertain for those not connected to the mining sector, and most likely see a further widening in WA’s two speed economy,” CCI chief economist John Nicolaou said.
“What has masked this trend weakness is the record levels of growth and investment in the resources sector which has seen the headline growth figures remain very strong.”
Westpac WA general manager Jay Watson said the bank’s clients’ growth ambitions and capital expenditure reflected the reality of a two-speed economy.
“The retail market has remained subdued and the move to seven days a week trading will be watched with interest in regards to improved sales results,” Mr Watson said.
“While we are seeing a shift in consumer’s behaviours, there is disposable income available for discretionary spending and along with continued reduction in unemployment and increases in full time employment we are hoping that confidence will return to the market.”
