Western Australia remains well-placed to weather any economic storm triggered by Donald Trump’s tariff regime, but easing population growth, softer commodity prices and a slow-down in business investment will weigh on the economic outlook.
CCIWA’s half-yearly Outlook report finds the impact of US tariffs on Australian steel and aluminium would have only a limited direct impact on WA. WA iron ore and alumina is processed elsewhere, allowing both to side-step the tariffs. 
CCIWA Chief Economist Aaron Morey said any escalation of the tariff tit-for-tat between the US and China would have flow-on impacts for WA.
“Around half of WA’s exports are destined for China so any economic slowdown there will be felt by businesses here,” he said.
“At the same time, a decline in demand for Chinese exports in the US could reduce demand for WA products used as inputs to production, potentially exposing our resources sector.”
WA well-placed to withstand headwinds
Despite these impacts, the Outlook report found WA’s economy was well-placed to withstand global headwinds in 2025.
“The fundamentals of the WA economy remain strong, and the rise of other trading partners in Southeast Asia will at least partially offset a downturn in demand from China, so we expect demand for iron ore in particular will remain steady over the longer term,” Morey said.
The Outlook report also revealed:
- The overall rate of growth in the WA economy slowed in the second half of 2024, with just 0.25% growth forecast for the current financial year.
- Household spending has slowed over the past six months as cost-of-living pressures continue to bite.
- Business investment is likely to end this financial year in the decline, at -1.5%, down from a growth rate of 12.7% in the previous year.
“We were coming off a very high base for business investment in 2023-24, but momentum has clearly shifted,” Morey said.
“This is likely driven by persistent cost pressures for business and weakening demand for commodities like nickel and lithium.
“We expect business investment to bounce back next financial year as existing activity ramps up and some new projects come online.”
He added: “In this challenging climate, attracting investment is essential to sustaining future job growth. Governments must play their part by providing certainty for businesses and facilitating major projects.
“With the North West Shelf project underpinning thousands of jobs and billions in economic activity, the Federal Government must end the uncertainty and approve its extension without delay.”
CCIWA’s Economic reports, including Outlook, are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.
