Western Australia has one of the poorer performing economies in the country at present but, despite considerable media coverage about rising unemployment, reduced population growth, and business closures, the outlook is not all gloomy.
Market observers say there are positive signs for the state’s economy on the horizon.
According to the July 2019 CommSec State of the States report, WA continues to face challenges with the transition of resource projects moving from production to export phase. And while most economic indicators have WA trailing behind most other states and territories, annual population growth is the strongest in almost four years and exports are growing rapidly.
The WA State government anticipates growth in Gross State Product to accelerate to 3.5% in 2019-20, and 3% in 2020-21 onward, with further growth in exports and the domestic economy becoming the major driver of growth.
In the June quarter, business investment rose 0.8%, underpinned by a nearly 20% increase in spending on machinery and equipment, according to ABS figures.
The Chamber of Commerce and Industry WA’s biannual economic forecast predicts a ramp-up of spending on major new and replacement resources projects. This ramp-up is anticipated to turn last financial year’s decline in business investment of 8.4% around to a 6% increase in 2019-20, and a further increase to 9% in 2020-21.
Businesses outside the resources sector will, unfortunately, be slower to recover.
As the WA economy starts to upswing, the businesses who are least affected by skill shortages will be the ones who invest in training now. This is particularly true of skill-shortage occupations like traditional trades, as well as administrative and clerical roles which continue to be among the most in-demand occupations across all sectors.
So when the upswing comes, make sure your business is ready and has the workforce it needs.