'not bad' will be good enough

In Today's Australian

"New boom `just months away'

WESTERN Australia's peak business group has ramped up its economic growth forecasts, claiming the next boom is just months away and the state will be "the envy of the nation" again.

In a report being released today, the WA Chamber of Commerce and Industry has dumped its previous 0.25 per cent economic growth forecast for this year, replacing it with 1.5 per cent in the short term, rising to 5 per cent next year and 6 per cent growth by 2012-13.

With more than $200 billion of projects in the pipeline and the global economy bouncing back, the CCI said unemployment had peaked, business investment was back on track and exports were set to grow by more than 10 per cent every year. CCI chief economist John Nicolaou told The Australian businesses were gearing up for the next wave of prosperity.


"The full effects of the upturn will start to really be felt in the second half of this calendar year," he said. "The impact of the financial crisis will still be felt in terms of our growth number this financial year, but thereafter we're heading into very strong territory."

He said business investment was the key driver, and while it slumped during the global downturn, confidence had returned.

The report predicts business investment will grow 7 per cent in 2010-11, and 12 per cent in 2012-13.

"There are big projects about to gear up, most notably Gorgon, and there are also a lot of smaller businesses that held off on investment decisions that are looking at it now," Mr Nicolaou said.

The CCI sliced almost a full percentage point from its previous forecast for the state's unemployment rate, which it now expects to average 5 per cent this financial year and to fall again next year to 4.5 per cent.

"Within months, the state has gone from the verge of recession, to now ramping up for growth that will be the envy of the nation," Mr Nicolaou said.

"The turnaround in the state's economic fortunes has been impressive. It's hard to see any other state surpassing the potential growth this state will experience."

But the report also warns of trouble ahead with looming labour shortages."

Nod management don't have the best reputation right now. But they don't have to be good. They just have to be competent. there is no sophisticated approach required, just push sales and keep a leash on costs.