A report from Access Economics has found that Western Australia’s economic recovery may be too dependent on Chinese iron ore demand.
According to the report, despite having largely weathered the economic storm of recent months, Western Australia’s unemployment may rise as high as 7.4% in the coming financial year.
Access Economics director Chris Richardson said that China’s strong demand for iron ore is not sustainable in the future and a drop off will hurt Western Australia.
“Steel makers and other firms, government-owned and private in China, have been showered with cheap money and they have put some of it into commodity purchasing,” he said.
“It does raise question marks over just how long it will last.
“Much depends on China and just how sustainable its current rate of iron ore purchasing is, and certainly we have some concerns on that front.”