Western Australia’s economy is showing signs of resilience in the face of global uncertainty, but growth is expected to slow, according to CCIWA’s latest half-yearly Outlook report.
The report forecasts the State’s economic growth will ease from 3.3% in the current financial year to 2% in 2026-27, as ongoing geopolitical tensions weigh on global conditions.
Uncertainty stemming from the conflict in the Middle East is expected to drive much of this slowdown, with flow-on effects already being felt across the economy.
CCIWA Chief Economist Dr Daniel Kiely said while WA was well-placed to weather global headwinds, conditions would remain challenging.
“WA’s economy is resilient, but it will be tested,” he said.
“The biggest factor at play for WA is the impact the conflict is having on costs, which have flowed through to the whole economy since the war began.
“The longer this conflict drags on, the deeper the impact on all economies, and the more difficult it will become to predict what might happen.”
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The Outlook report also warns of further pressure on households and businesses, with up to two additional interest rate rises expected in the coming months, following the increase in early May.
Business and consumer confidence is also expected to weaken as uncertainty persists.
“The uncertainty at the moment makes it a tough environment for businesses to invest, grow and expand,” Kiely said.
“This is particularly true for energy-intensive industries and those impacted directly by the closure of the Strait of Hormuz, like road freight and agriculture.
“We’ve also seen a very dramatic decline in consumer confidence, with many households reining in their spending as a result of soaring fuel prices and other cost increases.”
Meanwhile, the State’s housing market is expected to remain under pressure due to ongoing supply constraints.
“We’ve seen a 14% increase in dwelling approvals in WA for the year to February, which shows there is a good pipeline of housing projects, but given WA’s population growth, it’s not yet having an impact,” Kiely said.
The report also forecasts a modest rise in unemployment, increasing from 4% in the current financial year to 4.3% in 2026-27.
CCIWA’s Economic reports, including Outlook, are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.
