Saturday, August 11, 2018
Good news for all Australians: investment has rebounded and employment and confidence are up in Western Australia.
Vacant shops are conspicuously commonplace, the housing market has hit rock bottom and the banter on the streets isn’t as naturally optimistic as it once was, but look beyond the surface at the economic indicators, and there are clear signs that Perth and Western Australia are about to take off again.
This, of course, is good news for the rest of the nation. More than 34 per cent of Australia’s exports are from Western Australia, most of which is iron ore, our single biggest export commodity. And, as eastern staters are often reminded when they cross the Nullarbor, increased consumer confidence in the west is a bonus for states that don’t pull their weight on the GST.
“Nobody is using the b- word (boom) - yet,” Fortescue mining’s Tim Langmead told the MRC. Fortescue recently started construction on the Eliwana iron ore project in the Pilbara, a $1.7 billion operation that will reach peak construction in a year. Construction will create 1900 full-time jobs and there will be 500 full-time workers when production starts in 2020.
Even that project is dwarfed by BHP’s South Flank iron ore operation, also in the Pilbara. Again, the employment prospects are impressive: 2500 in construction and 600 in operation.
Western Australia is also on track to become the world’s leading lithium miner, at a time when demand for batteries shows no sign of abating.
As The West reported in January, the Talison lithium mine at Greenbushes, south of Perth, is ramping up to meet burgeoning global demand.
It is doubling its capacity and building a new processing plant at Kwinana to convert the lithium concentrate into higher value lithium hydroxide.
“The company began building the $400 million plant in October last year, but is already eyeing a $317 million expansion aimed at doubling its capacity,” The West reported. Add to these two industries a surge in gold mining, and the west is looking like a smart place to invest again.
In April, the WA Chamber of Minerals and Energy commissioned KPMG to report on the state’s economic forecast. “Over the next decade, economic growth in Western Australia is expected to continue to be higher than the national average,” the report found. “Importantly, growth in the Western Australian economy is also expected to be less volatile than it has been in the recent past.” The big mining operations that have been announced since the report will only add to that optimism.
This is starting to filter through to consumers. The WA Chamber of Commerce and Industry’s latest consumer confidence survey, released in July, found that the state has steadily increased its optimism since the slump in 2013.
“While there are green shoots in the economy and more optimism on the horizon, a more positive outlook for the WA economy is filtering through to households slowly,” it said.
Confidence in the state government’s handling of the economy was up 6 percentage points to 34 per cent. There was an even higher jump for the federal government, up 8 points to 28 per cent. The subsequent announcement from the federal government for a $4.7 billion boost in the state’s GST allocation will undoubtedly have increased that approval rate as well as quietened that other West Australian quirk - talk of secession - which has enjoyed a periodic revival lately.
Now, if only the West Coast Eagles can win the 2018 premiership flag without their star midfielder Andrew Gaff, banned for eight weeks for laying a shocking punch to the jaw of Docker Andrew Brayshaw during last week’s Perth AFL derby, then WA can return to its usual demeanour of showing the “eastern states” how to prosper.