THE WA economy is rebounding and should start delivering a better jobs market and higher wages to the State’s workers, a report out today shows.
The WA Chamber of Commerce and Industry biannual review of the State also predicts the economy — after shrinking last financial year for the first time since the 1990-91 recession — will grow this year.
The report was supported by separate research released by the ANZ which suggests the WA economy is back among the faster growing parts of the country.
CCI chief economist Rick Newnham said the slowdown in the State that had hit the jobs market, property prices, business and consumer confidence had come to an end.
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READ NOWThe drop in business investment from the peak of the resources boom had also run its course.
“Once business investment stops falling and returns to growth, which we expect will be this year, the whole economy will begin to pick up,” Mr Newnham said.
After shrinking 2.7 per cent in 2016-17, the economy will expand 0.9 per cent this financial year before growing 3.3 per cent the following year, the CCI forecasts.
Late last year the chamber was expecting unemployment to stay above 6 per cent for the rest of the decade.
Now it believes the jobless rate will average 5.8 per cent this financial year before falling to 5.6 per cent in 2018-19.
A tighter jobs market will feed into wages, which are tipped to rise 1.7 per cent this financial year and 2.4 per cent the following year.
“This should be welcome news for job hunters and those that are already employed,” Mr Newnham said. “When there are more people in work and few people competing for limited job vacancies, then we can expect wages growth to return to WA as well.”
The CCI’s outlook is in line with a report from the ANZ on the performance of State and Territory economies.
The bank is more upbeat about the WA economy, saying it expects it to expand 3.3 per cent in 2018-19.
There were positive signs in the latest measure of wages from the Australian Bureau of Statistics, with annual growth in WA increasing 1.5 per cent at the end of last year.
It was the highest annual rate since the middle of 2016.
Nationally, the wage price index increased 0.6 per cent in the December quarter, for an annual rate of 2.1 per cent.
Private sector wages are sluggish, increasing 1.9 per cent in the year.