WA's economic comeback moves up a gear

Western Australia's economic comeback is taking place faster than first predicted with growth expected to rise steadily over the next few years, reaching 6.25 per cent in 2012-13, according to the Chamber of Commerce and Industry WA.

The full statement by CCI Chief Economist, John Nicolaou is below:

Fresh evidence has emerged that Western Australia's economic comeback is taking place faster than first predicted.

The State's peak organisation representing local business, CCI, has today released its quarterly snapshot of the local, national and international economies which provides more good news about the State's future.

After buffering the economy from the worst of the downturn, local businesses are now leading the State into the next wave of prosperity. Business investment has bounced back in the final quarter of 2009, with firms now looking to expand their operations to make the most of the better conditions.

WA households are also contributing to the turn-around in the local economy. After months of balancing the household budget, consumers are now spending-up on discretionary items, such as meals, entertainment and cars. Strong population growth is also expected to provide a boost to the housing sector.

These factors have prompted CCI to revise up its forecasts for the current financial year. CCI now expects the WA economy will grow by three per cent this financial year, up from 1½ per cent forecast late last year.

Growth is expected to rise steadily over the next few years, reaching 6.25 per cent in 2012-13.

While WA remains a stand out performer, the national economy has also improved in recent times. The national economy is expected to grow by 1.75 per cent in 2009-10, before picking up to three per cent in 2010-11.

The improved economic conditions are also encouraging for Western Australians looking for a job.

After peaking at 5.7 per cent in September 2009, WA's unemployment rate is now trending downwards, and is likely to fall back to three per cent by the end of 2012-13.

Businesses are also looking to hire more staff, another good sign that the local economy has turned the corner.

However, the renewed demand for workers will see the return of severe labour shortages and upward pressure on wages. Businesses are already reporting difficulties in attracting the extra workers they need, while many more believe the problem will soon impact them.