It’s a common viewpoint that the WA economy is starting to turn for the better, however it may take years for WA to get back on its feet, led by local Perth business sectors such as Perth restaurants, construction, and an increase in demand for services such as real estate agents.
Deloitte Access recently released a report predicting that the recent improvement driven by a combination of an increase in demand for local Perth business offerings, as well as an increase in commodity prices has eased the reduction in the WA economy, which will have a flow on effect to wage increases.
In recent times the Perth economy has been weighed down by a contraction effect, resulting in unemployment increasing to 6.5%. This also contributed to massive increases in commercial property vacancy and a decrease in the housing market value.
Regardless of these recent events, Deloitte Access is of the opinion things can turn around for WA, with the immediate future showing signs of improvement by way of consumer spending, and an increase in population growth.
It is envisage that over the next year and a half, unemployment will decrease, with wages staying in front of inflation rates.
Chris Richardson was quoted as saying:
“A series of indicators are pointing to light at the end of the tunnel: retail sales may be weak, but they’ve been growing in recent months, while job growth is showing signs of a turnaround for the better, as are the number of job vacancies,”
“That’s why we’re comfortable to say that the worst is passing, and that the next few years are likely to see improving conditions — slowly so, but the trend should be WA’s friend for the next few years.”
These positive factors will provide a much more stable platform for the new State Treasurer.
Federally, the same bright outlook will allow the Federal treasurer to breathe a little bit easier as well, due to the positive outlook for Australias economy as a whole.
With China continuing with a strong demand, in conjunction with the recent increase in commodity prices, the coffers in our nations capital are far greater than expected at the moment.
Despite this positive outlook, overspending can be an issue for the upcoming Federal budget.
“The current improvement in the deficit trajectory simply says that the twin engines of chance — a China boom and a house-price boom — are both supporting the national tax take at the same time,” he said.
“That’s great, but it probably won’t be a long-lived combination.”