CCIWA Chief Economist
Aaron Morey
Western Australia’s economy is short 55,000 workers, according to the latest CCIWA Business Confidence Survey. The shortfall is set to cost businesses $1.5 billion over the next year, if skills shortages persist.
The September survey responses show just one third (35%) of WA’s vacancies are expected to be filled by local workers. The approximately 55,000 workers WA is short would normally be recruited from interstate and particularly overseas.
Shortages are most acute in accommodation and food businesses, which account for one in four (24%) vacant jobs. Eight in ten (85%) respondents in the sector identify shortages as a barrier.
That is followed by the resources sector, which accounts for nearly one in five (18%) of the vacancies. 86% of resources businesses cite concerns about skills shortages.
WA’s construction sector accounts for similar share of vacancies (15%) and degree of concern (76%).
WA businesses report that if shortages are not resolved, they stand to lose a combined $1.5 billion. 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).
WA businesses also strongly supported reopening the economy to resolve workforce pressures, along the lines of the National Cabinet roadmap. Three quarters (78%) of businesses want the interstate border opened once an 80% vaccination rate is reached. Seven in ten want an end to snap lockdowns (73%) and hard international borders (71%) upon that milestone.
Turning to the economy, the run of sky-high confidence among WA businesses has ebbed, with long-term confidence declining 19 points since last quarter. One in five (22%) expect worse economic conditions, a 13-point increase. Resources remains our most optimistic sector (76%) despite confidence easing in that sector by 12 points due to declining iron ore prices.
In addition to vindicating the National Cabinet roadmap, the results reinforce the need for the State Government to adopt measures to drive economic diversification. 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.
Read the full Business Confidence Survey Report – September 2021
