Advanced Search

Share Coverage



Category: Economic Trends / Business, Economics and Finance

Slump leaves WA in last place in economic rankings

Monday, 23 Jan 2017 08:14:12 | Graeme Powell

The economic downturn has a silver lining for first home buyers. (AAP: Lukas Coch)

Western Australia continues to have the worst performing economy in the nation, with house prices tumbling alongside economic growth and investment contracts.

Commsec's State of the States report ranked WA in last place on eight indicators including economic growth, retail trade and housing.

The best performing economies were New South Wales, Victoria and the ACT.

Commsec's Craig James said WA's downturn was due to the end of the mining boom.

"The other thing too, is that other states (and Territories) are doing relatively better, so New South Wales, Victoria and the ACT are benefiting from the real strength that we are seeing in terms of housing construction," he said.

"Perth and Western Australia more generally had that degree of strength when the mining boom was fully in operation."

The report found annually, economic growth was down -5.6 per cent, while construction work was down -41.7 in Western Australia.

Home starts were down -22 per cent, while housing finance was down -8.7 per cent.

WA Treasurer Mike Nahan played down the slump, saying the state economy was going through a transition after experiencing one of the biggest booms in its history in 2011 and 2012.

"The economy of Western Australia grew by nearly 12 per cent," he said.

"The other states during that period other than Queensland were stagnant.

"We are now moving from [an] investment to production phase [in the mining industry] and growth driven by investment has slowed, job employment has slowed.

"The only way you could have avoided this, of course, is to have avoided the boom in the first place."

New home buyers win amid economic doldrums

But Mr James said the silver lining of the downturn was falling housing prices were making homes more affordable for first home buyers.

"We know that booms are not sustainable," he said.

"Housing affordability is improving quite markedly and that is going to lead to more and more home buyers back into the market."

NSW took Western Australia's title of the nation's strongest economy in mid-2014, as the mining construction boom began to slow.

Western Australia was ranked third in October 2015 before continuing its downward slide, moving to the bottom rung on the ladder in October.

Mr James said there was also some light at the end of the tunnel for the state's economy, which had been in the doldrums for some time.

"There very much is a glimmer of hope," he said.

"What we are seeing is iron ore prices up significantly over recent months.

"Prices generally for metal and mining commodities has been rising, export volumes out of Western Australia are at record highs and there's a pick up in the rural sector, so there certainly there are areas of hope that Western Australia can rise up from here."

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend