With the world teetering on a knife-edge and global interest rates increasing at their fastest pace in history, CCIWA’s biannual ‘Outlook’ report, entitled ‘Will We Bottle It?’ shows WA’s economy is well placed to weather the storm of a potential recession.
The only WA-based non-government economic forecast states that WA’s economic fundamentals remain as solid as ever and while the pressure peaks, WA’s private sector is shoring up our economy. WA’s domestic economy is 12% bigger than what it was pre-COVID and the number of Western Australians in full-time work continues to grow.
The report states that both the household and business sectors have driven this performance, with WA’s strong jobs market stimulating consumer spending while the strength of the resources sector has propelled business investment.
WA’s economic growth is expected to be underpinned primarily by large-scale business investment, the State Government’s Asset Investment program and a strong pipeline of residential construction, although risks remain high.
“With a global economy on the knife-edge of uncertainty, WA must grasp every opportunity to grow, diversify and attract investment, emerging industries and skilled workers,” said CCIWA chief economist Aaron Morey.
Surging interest rates and costs are expected to dampen WA household spending growth to 3% this financial year and 0.75% beyond. Despite of the evident challenges such as rising costs and geopolitical risks, business investment growth of 4% this financial year will underwrite the economy. This puts WA’s domestic economy on track to grow 3.5% in 2022-23, an easing of 2.1% since last year.
Despite the uncertainty, WA remains the only State with more job vacancies than unemployed people, and unemployment is expected to average 3.5% for the rest of the financial year.
However, the report shows that we cannot be complacent. WA has a unique opportunity to capitalise on the rapid shifts occurring in the global economy, including changes in energy markets, shifting patterns of global trade, and advancements in technology.
“Easing our uncompetitive tax on jobs, which burdens WA businesses more than any other State, is a critical place to start,” Morey said.