EXPORTERS should remain relatively shielded from any dramatic downturns in the global economy, with the demand from China expected to remain robust.
EXPORTERS should remain relatively shielded from any dramatic downturns in the global economy, with the demand from China expected to remain robust.
Against the backdrop of pressures in global equity and financial markets in the US and other OECD economies, the strong growth in emerging economies, including China, is expected to continue, albeit at more moderate rates.
The latest forecast from the Australian Bureau of Agricultural and Resource Economics points to economic growth in China averaging about 10 per cent in 2008, before declining to 9.3 per cent in 2009.
The potential impacts on Western Australian exporters of the global financial crisis are likely to be in the value of the Australian dollar, which has dropped to US81 cents, and the ability to secure credit for business investments.
"Clearly the risk of medium to longer-term slowing in export growth is being fuelled by the worsening of the global credit crunch, particularly as a lot of export industries are capital intensive," HBOS Australia chief economist Alan Langford said.
"It's also being significantly and almost immediately ameliorated by the falling Australian dollar.
"It's more into 2009-2010 where the problems may lie rather than next financial year."
Mr Langford added that a significant downturn in China, enough to affect WA's major export commodities, looked unlikely at this stage.
"Between 9 and 10 per cent growth is not going to send key commodity markets into a tailspin," he said.
"Those are great rates, it's not going to send iron ore or coal prices tumbling. Five per cent in China might."
Fortescue Metals Group executive director Graeme Rowley is also confident China's internal demand will keep growth strong, potentially isolating itself from the economic crisis in the US. Mr Rowley said this week that China's focus on its own urbanisation and development of living standards would continue to fuel its growth.
Chamber of Commerce and Industry WA chief economist John Nicolaou told WA Business News the WA economy had the capacity to ride out the current crisis.
"We have a stable financial system, and a well regulated financial system, and we have that major stimulus which is China," he said.
But while demand for WA's mineral and petroleum commodities is expected to remain strong, supply-side constraints remain a challenge, according to Abare.
The bureau believes that global supply for most commodities will continue to be adversely affected by difficulties in sourcing skilled labour, long lead times for key items of equipment and rising costs.
Competition for resources has increased the costs of a number of key inputs, Abare said.