The Chamber of Commerce and Industry Western Australia (CCIWA) has recognised commodities as the saviour of the state’s economy, after the pandemic took its toll in 2020.
In the CCIWA’s biannual Outlook report for August 2021, it was found that the Western Australian economy has officially transitioned from the recovery stage and moved into expansion.
“Above all, the most significant force behind WA’s economic punch has been the strength of the mining sector,” the report stated.
“A cocktail of surging commodity prices and robust demand from WA’s largest trading partner boosted activity in the mineral resources sector and delivered the State Budget an unexpected windfall of cash (around $1.2 billion).”
At the same time, Federal stimulus as a result of COVID-19 has been allowed to flow freely throughout the state as it managed to maintain low levels of the virus.
CCIWA chief economist Aaron Morey, however, warned the ongoing skills shortage would surely temper the state’s growth potential.
“Skills shortages are impacting four out of five (79 per cent) WA businesses, trapping our economic engine in a lower gear,” Morey said.
“With closed state and international borders, we have no emergency release valve to ease the pressure.
“There is also a lack of new significant business investment on the horizon, with non-mining investment having contracted in seven of the past eight years.”
To combat this, the report stated vaccination rates would be essential to enable the economy to continue its expansionary phase.
“Attaining a high rate of vaccination is the only viable path to successfully moving beyond the economic and health risks of COVID-19 and reserving the terms ‘snap lockdown’ and ‘hard border’ to history textbooks,” the report stated.
“Any further delays to the vaccine rollout will pour cold water on an otherwise red hot economic recovery.”