Aaron Morey
CCIWA Chief Economist
Business confidence in Western Australia has remained firm, declining only slightly from the decade-highs recorded late last year, according to the first CCIWA Business Confidence Survey of 2021. The strong outlook is tempered by rising concerns about skills shortages, which top the table as the most pressing economic challenge for the WA business community. The survey shows skills shortages are twice as concerning for WA businesses as a future COVID-19 outbreak.
More than half of WA’s businesses are struggling to fill a skilled occupation (54%), with jobs like drillers, labourers, machinists, engineers and technicians in top demand. The sectors with the biggest struggle were food services (77%), wholesale trade (75%) and construction (70%).
Despite skills shortages, overall business confidence has held firm. With the deployment of the COVID-19 vaccine expected to be complete within 12 months, three in five (61%) WA businesses are optimistic about the economy over that timeframe.
Although the Federal Government’s JobKeeper program is set to expire, just 10 per cent of WA businesses expect to shed jobs next quarter. More than four times as many businesses are set to grow their staff numbers (45%).
Sectors closely linked to mining continued to lead in confidence, including professional services (75%), manufacturing (70%) and construction (62%). In the resources sector, the strong outlook (73%) moderated by 7 points, amid some apprehension about the sustainability of iron ore prices and trade tensions with key partners.
The results highlight how confidence across WA’s economy hinges upon mining, with our key challenge being economic diversification. The fundamental task of the re-elected State Government will be to foster broader economic growth, with payroll tax reform a key lever to unleash growth among medium-sized businesses. To address skills shortages, there must be an appropriate role for skilled migration, and fewer barriers to women’s participation in the workforce.
Read the full CCIWA Business Confidence Survey – March 2021
