Skilled labour shortages have emerged as the number one challenge for businesses in regional Western Australia as 2024 draws to a close.
CCIWA’s quarterly Regional Pulse report for the December quarter found the availability of skilled labour has overtaken rising costs as the biggest barrier to growth for regional businesses, with seven in ten (70%) identifying it as a challenge.
Businesses in the Mid-West/Gascoyne (89%), Kimberley (79%) and Great Southern (77%) regions reported the biggest concern about skills shortages.
Concern about rising costs remains a top issue for regional businesses, with two thirds (68%) reporting it as a concern – down three percentage points from the September survey.
CCIWA Chief Economist, Aaron Morey, said labour shortages were more acute in the regions than in metropolitan Perth.
“The labour market is tight right across WA with the unemployment rate at 3.3% for November, so it’s not surprising to see that playing out most acutely in the regions,” he said.
“Across regional WA, 74% of businesses said they had struggled to fill a skilled position and in the Kimberley, 100% of businesses we surveyed said they had struggled with this.
“We also asked businesses whether their labour costs had increased this quarter, and 75% said they had.”
The report found businesses in regional WA were more optimistic about conditions in the next 12 months than those in metropolitan Perth.
Businesses in the Pilbara (56%) Goldfields-Esperance (55%) and Kimberley (55%) regions were the most optimistic.
“Confidence in the Pilbara has increased by eight percentage points since the September survey, likely buoyed by the resilience in iron ore prices and momentum from the dry season,” Mr Morey said.
“We saw big surges in confidence in Goldfields-Esperance, up 22 percentage points off the back of strong gold prices which are sitting at near record highs.
“Confidence in the Kimberley was up 23 percentage points, likely fuelled by the opening of the new Brooking Channel Bridge to unlock supply routes and strong economic momentum to end the dry season.”
Businesses in the Wheatbelt were less optimistic with only 27% indicating they expected conditions to improve, likely driven by recent rain delaying harvesting and causing crop damage.
The report also investigated whether a lack of housing for workers was hampering regional businesses, with two in five (39%) regional businesses indicating it was – more than double the rate in the Perth metro area.
The housing shortage was most acute in the Kimberley, where 79% of businesses said it was a barrier to growth, followed by the Wheatbelt (55%), Goldfields-Esperance (45%) and Mid-West/Gascoyne (45%).
“A lack of housing for workers emerged as the third biggest barrier for regional businesses, which really highlights how significant the shortages are,” Mr Morey said.
“The lack of available housing for workers feeds directly into the skills shortages we’re seeing across regional WA.”
