Western Australia to prop up entire nation’s growth
By 2015-16, the report predicts that the value of WA’s exports will almost double. Average weekly earnings and population growth are also expected to outshine all other states as the west continues to benefit from the insatiable demand of China which is managing to offset slowdowns in Europe and America. The strength of the WA economy and its resources sector appears to be poorly understood nationally despite Deloitte’s analysts suggesting the state is heading towards a boom like the one experienced in 2007 and 2008.
“The rest of the economy could pack up and go home and the announced capacity expansion pipeline could still keep growth going for the better part of a year,” it says.
The volume of investment projects either underway or planned is “simply staggering” according to the report, underpinned by two major LNG projects backed by Chevron. One of these, the Wheatstone project valued at $29 billion, was just approved in September 2011.
The strength of the resources sectors continues to grow with BHP Billiton reporting its West Australian iron ore shipments have jumped by 28 per cent to a record 173 million tonnes a year. Fortescue Metals Group also posted a record quarterly export figure for the September quarter, of 12.36 million tonnes, an increase of almost 21% on the same period last year. Even the retail sector in WA is on the up with 9% growth over the past year, five times the national rate.
Any worries of a renewed global financial crisis have simply shaved some growth expectations off both WA and China which Deloitte’s believe is a welcome relief. They anticipate the slight slowdown will enable both China and WA to stay closer to their supply side potential and manage a more sustainable level of growth over coming years.
“Earlier outlooks for both China and WA were too strong for our liking, leading us to warn of rising inflation and skill shortages in both regions.
“Now China and its best global supplier – WA – are set to grow at more sustainable rates in the next year or two”.