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WA’s skills shortfall set to cost businesses $1.5b

A shortfall of 55,000 workers in WA is set to cost businesses $1.5 billion over the next year, the latest CCIWA Business Confidence Survey shows, with the longer-term outlook also taking a hit.

The September survey found a cocktail of rising material costs, ongoing skilled and unskilled labour shortages, and the reintroduction of hard border restrictions with NSW and Victoria has dented the confidence of WA businesses, sending the longer-term outlook to a 12-month low.

One in five (22 per cent) expect worse economic conditions, a 13-point increase.

Consistent with previous editions of the Business Confidence Survey, skilled labour shortages remain the biggest challenge for the WA business community, with 71 per cent of businesses identifying they are struggling to fill a position this quarter – down only slightly since June.

The responses show just one-third (35 per cent) of WA’s vacancies are expected to be filled by local workers, with the shortfall normally met by interstate and overseas talent.

Shortages are most acute in accommodation and food businesses, which account for one in four (24 per cent) vacant jobs, followed by the resources sector, (18 per cent). Some 86 per cent of resources businesses cite concerns about skills shortages. WA’s construction sector accounts for a similar share of vacancies (15 per cent) and degree of concern (76 per cent).

“WA businesses report that if shortages are not resolved, they stand to lose a combined $1.5 billion,” says CCIWA Chief Economist Aaron Morey.

“On average, respondents indicated they would lose $140,000 over 12 months, as they strain to keep up with demand, turn down work and reluctantly reduce their operations.”

Heavier losses are expected among manufacturers ($176,786) and professional services firms ($221,428).

Other factors weighing on the minds of WA business owners include the softening iron ore price and a lack of clarity around WA’s plan to reopen to other States and countries once key vaccination targets are met.

Read the full Business Confidence Survey report here.

WA businesses also strongly supported reopening the economy to resolve workforce pressures, along the lines of the National Cabinet roadmap. Three quarters (78 per cent) of businesses want the interstate border opened once an 80 per cent vaccination rate is reached. Seven in 10 want an end to snap lockdowns (73 per cent) and hard international borders (71 per cent) upon that milestone.

Interest rates, vaccine rollout

However, record low-interest rates and optimism around the domestic vaccine rollout continue to buoy WA business confidence, with 52 per cent of businesses identifying they would support mandatory vaccination in their businesses, 22 per cent indicating they would possibly support the measure, and the remainder either unsure or opposed.

“In addition to vindicating the National Cabinet roadmap, the results reinforce the need for the State Government to adopt measures to drive economic diversification,” says Morey.

“With a significant budget surplus, the Government has cover to fuel growth through tax and regulatory reform, as well as more strongly competing against other markets for business investment.  Recent investment attraction efforts from Queensland and NSW show there is fierce competition for business investment.”

CCIWA’s COVID-19 page contains up-to-date information for businesses.

For help and guidance on navigating COVID-19 restrictions, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or [email protected].

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