WA economy bucks national trend after recording another contraction

WA economy bucks national trend after recording another contraction

Much of the contraction was due to a 6.4 per cent fall in property investment and 1 per cent fall in business investment, such as machinery and equipment. Government investment also fell by 1.6 per cent.

However, there is a promising sign as households seemingly open their wallets more, with consumption jumping 0.5 per cent in the lead up to Christmas.

Wednesday’s figures don’t include the impacts of the January bushfires or the coronavirus outbreak, which the ABS suspects will be felt in the March quarter.

Chamber of Commerce and Industry WA chief economist Aaron Morey said the WA economy was sailing into the oncoming coronavirus storm in a fragile state.

“Business investment is a significant part of the WA economy, meaning even small declines can have a large impact,” he said.

Mr Morey said the state government should stay focused on policy reforms which would help drive a more competitive WA economy including revised trading houses, a shake-up of the electricity market, and getting rid of red tape.

“CCIWA is confident that with a renewed focus on reform, and building on improved finances and recent payroll tax relief, Western Australia will be in a reasonable position to withstand global headwinds,” he said.

Treasurer Ben Wyatt was contacted for comment.

According to state budget papers, gross state product – the total measure of a state economy – is expected to grow by 3.5 per cent in 2019-20.

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