Western Australia will remain an economic powerhouse even if world financial markets suffer another significant downturn, the state’s peak business group says.
WA’s Chamber of Commerce and Industry’s latest economic outlook publication tipped WA economic growth to hit 7.25 per cent in 2012-13, up from 5.25 per cent in 2011-12.
In the case of a global economic meltdown similar to the GFC, WA’s economic growth would remain at a healthy 5.5 per cent, the Chamber said.
“WA’s domestic demand is likely to hold up, with the large pipeline of investment projects already approved acting as a buffer against weaker activity elsewhere in the economy,” CCI chief economist John Nicolaou said.
Mr Nicolaou said a business investment was expected to continue in WA over the coming years, with 15 per cent growth in FY2012 and eight per cent in 2013-14.
“As the economy strengthens, CCI expects the labour market to tighten with the unemployment rate expected to average 3.5 per cent in 2012-13 and drop further to three per cent in 2013-14,” he said.
“This will put more pressure on wages and add a further cost burden for business.”
The report flagged a recovery for the housing sector to occur in 2013-14, with residential building investment estimated to grow by 10 per cent, after a 5 per cent rise this financial year.
