Digging deep: Mining shelters WA’s economy from the global storm – Outlook

Aaron Morey

Chief Economist, CCIWA

COVID-19 wiped a decade of growth from WA’s domestic economy in 2020, but global commodity markets and Federal Government stimulus have enabled WA’s economy to rebound.

The biannual Outlook report, published today by the State’s peak business group, shows WA’s economy has been sheltered from harm by extraordinary global commodity prices and $17 billion in support from the Federal Government, in combination with looser restrictions within WA.

WA’s domestic economy is expected to return to 0.7 per cent growth this year, or 2.7 per cent including our record exports. This will leave WA’s economy smaller than expected pre-pandemic, but in an enviable position compared to other economies.

Outlook is the only non-government forecast of the WA economy conducted within WA.

Looking ahead, China’s reliance on WA for iron ore, and a big pipeline of housing and infrastructure construction will support the economy through difficulty this year. With WA households saving more, and paying off more of the mortgage, we are well-positioned to withstand challenges ahead as JobKeeper and other support programs expire.

At the same time, WA businesses are impacted by ongoing border restrictions, and have carried the cost of WA’s recent snap lockdown. The plight of these businesses does not show up in economic figures so dominated by mining, which comprises an outsized 43 per cent of our economy.

It would be a mistake for WA to complacently ride the back of our mining sector. To be ready for changing global conditions, CCIWA urges the State Government and Opposition to pursue reforms to strengthen and diversify our economy and create jobs. This includes key CCIWA recommendations to reduce WA’s payroll tax, help parents return to the workforce, and ease restrictions on shops and shopping.

The full Outlook report is attached.

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