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WA’s domestic economy returns to growth

Western Australia’s domestic economy is showing strong signs of being back on track, growing for the first time in more than four years, in year on year terms.

Chamber of Commerce and Industry WA (CCI) Chief Economist Rick Newnham said this is positive news for WA’s economy, which is finding its feet after transitioning from mining construction to production.

“For the first time in four and a half years the WA domestic economy has expanded,” Mr Newnham said.

“Piece by piece we are putting together a more optimistic outlook for the future of the WA economy.

“Although domestic growth is just 0.2 per cent, year on year, it is driven by rebounding household consumption stemming from increased optimism in WA households. Household consumption has grown by 1.5 per cent year on year after weak growth in 2016-17.

“There are better signs for job creation with business investment falling by just 4.4 per cent.

“The decline in business investment has been a weight pulling down WA’s economy and restraining jobs growth. Once business investment stops falling and returns to growth we expect the whole economy to begin to pick up.”

This is supported by the latest WA Super–CCI Survey of Business Confidence which revealed that business confidence in WA has surged in 2018 to mid-boom levels as optimism rises about the State’s economic outlook.

“Business confidence hit a seven-year high in the March 2018 quarter, with 75 per cent of WA businesses expecting the economy to improve or stay the same in the short term,” Mr Newnham said.

“This highlights that businesses are feeling more confident about the future of the WA economy, which continues to be led by the mining sector, with 83 per cent anticipating stronger economic conditions for the year ahead. This isn’t surprising, given $103 billion worth of resource projects are estimated to be in the pipeline.

“CCI will soon release its latest forecast for the WA economy, Outlook, outlining how we believe the economy will perform over the next three years.”

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