CCIWA’s latest economic forecast sees Western Australia well-poised to mitigate the worst impacts of a turbulent period ahead for the world economy. Entitled “What Goes Up…” our biannual ‘Outlook’ report – the only WA-based non-government economic forecast – clarifies that while economic growth will be moderate, WA should have an easier landing than most.
The WA economy has ridden the waves of global commodity strength and fiscal support. But rising interest rates and costs of doing business are bringing us back to earth. On the trade front, China remains fixed upon ‘COVID-zero’ and continued restrictions on Australian goods, a key risk to WA’s growth. War continues in Ukraine.
Heading into this global turbulence, WA is in solid shape, with 4.5 per cent growth and a domestic economy 9.3 per cent bigger than pre-COVID.
In 2022-23, our growth looks set to slow to 3 percent.
Underpinned by an 8.25% surge in business investment in projects like Woodside’s Scarborough and Pluto 2, workforce demand will remain strong with the unemployment rate set to average 3.75 per cent in 2022-23.
The slowing global economy and stabilising commodity prices will gradually see inflation ease, but prices are expected to keep rising for the rest of this year.
While the jobs market will remain strong, the pressures of interest rates and inflation will ultimately see consumption slow to 1.75 per cent in 2022-23.
The changing global conditions vindicate CCIWA calls to reinforce and diversify WA’s economy with economic reform. To relieve the rising costs of doing business and spur diversification, WA should reform payroll tax, which is higher for businesses in WA than any other State across a range of taxable wages. We must also help SMEs to lower their emissions profile in order to stay globally competitive. If we can get the right policy settings in place, WA will nail its landing out of COVID.
The full Outlook Report is available to CCIWA members