Western Australia’s economy continues to adjust following a decade of unprecedented mining investment. Western Australia is a highly‑competitive exporter of many mineral and petroleum commodities and the mining industry will continue to be a large contributor to the economy. Economic activity is likely to broaden into other sectors of the economy as the needs of Western Australia’s export markets change. In particular, Western Australia’s main trading partner – China – is moving from investment‑led growth with high demand for resources, to consumption‑led growth with growing demand for services and high quality agricultural products.
The decade of high mining investment had a major effect on Western Australia’s labour market. Many overseas and interstate workers and their families were drawn to Western Australia over the past decade. Migration, and higher participation among existing residents, allowed the labour force to increase quickly during the mining expansion, preventing severe labour shortages and additional wage cost pressures.
While employment grew in most of Western Australia’s industries over the past decade, there was particularly high growth in mining, construction and mining-related services, which led to a major change in the industry structure of the labour market. Mining overtook agriculture, forestry and fishing’s share of total employment in 2006 and manufacturing’s share in 2011, while construction overtook manufacturing’s share of total employment in 2005. Professional, scientific and technical services overtook education and training’s share of total employment in 2013.
More recently, the economy has entered a new stage of development. Falling mining investment is being offset by increasing merchandise export volumes from the new productive capacity created by the investments of the past decade, while fluctuating commodity prices are affecting the value of merchandise exports.
The labour market has followed the swings of the mining investment cycle. The unemployment rate rose from 3 per cent in 2008 to around 6 per cent now, but changes in the unemployment rate have been moderated by migration and adjustments made to hours worked, allowing the labour market to adjust quickly to changes in labour demand.
The Western Australian economy will grow at a slower rate in coming years, but off a much larger productive base than before the mining expansion. The major mining projects developed over the past decade bring large, ongoing operating and capital expenditures to sustain their operations, creating opportunities for mining services, manufacturing and transport industries, and higher mining employment.
The competitiveness of agriculture, manufacturing, tourism, education and other services exports are less constrained by the high Australian dollar than they were at the height of the mining expansion. Businesses will also benefit from increased availability of labour and lower input costs.
The Department of Jobs, Tourism, Science and Innovation publishes a monthly report on the Western Australian economy. The Western Australia Economic Profile covers the latest trends in:
- gross state product and associated macroeconomic measures
- industry composition of the economy
- terms of trade and commodity prices
- population growth
- labour market
- consumption and household income
- property market and construction activity
- international trade in goods and services
- minerals and petroleum sales, including iron ore, LNG and gold
- regional population, labour markets, minerals and petroleum sales, building approvals and agriculture production
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