Economic health check screams ‘go West’

Minerals-rich WA is Australia’s proverbial boomtown, with a rich economy pulling in a growing swell of Australians and international migrants eager to “go west” and live the good life.

Commonwealth Bank’s latest quarterly economic report on each state and territory and how they stack up against each other shows mining-heavy WA far ahead on key metrics like unemployment, private sector growth and state final demand, which calculates internal economic activity by stripping out exports.

WA’s unemployment rate sits at about 3.6 per cent, the lowest in the country.

Victoria, by contrast, has an unemployment rate of 4.3 per cent.

State final demand in WA grew 4.1 per cent across the year to June, the report states, more than double the growth rates recorded in South Australia, Tasmania and Victoria.

SFD grew 2.1 per cent in NSW and 2.6 per cent in Queensland.

“The strongest state economy in the country continues to be WA with economic opportunities luring interstate and overseas migrants to the state,” the report states.

“West Australian consumers are also seeing the highest level of spending growth in the country.

“WA is the only state in the country with the private sector contributing more than 50 per cent of annual economic growth.

“The housing market in Perth is surging, but from a lower base due to weak longer-term performance, meaning housing affordability remains comparatively better than other cities despite recent price rises.”

Wages are also growing at a healthy clip in the mining state, rising 4.2 per cent above the national average.

The peachy economic conditions are driving population growth, with a 3.3 per cent increase in the number of people living in the state through the year.

The figure is the highest population growth rate in the nation and WA remains the most in-demand state for internal migrants alongside Queensland.

The mining industry dominates economic activity in WA, accounting 50 per cent of Gross State Product.

Iron ore giants like BHP and Rio Tinto operate vast mine and rail networks shipping material from the heart of the state to port for export.

The state produced 860Mt tonnes of iron ore with a sales value of $139bn in 2023, the WA Department of Energy and Mines states.

But the boom has some expected downsides.

Perth now has the tightest rental vacancy rate in the country, according to the latest figures from Real Estate Institute of Australia, at just 0.4 per cent.

“A healthy vacancy rate is around 3 per cent indicating that markets are currently tight across the country, keeping rents growth elevated,” the report states.