WA economy growing faster than forecastPosted December 18, 2007...

WA economy growing faster than forecast
Posted December 18, 2007 19:00:00
Updated December 18, 2007 19:43:00

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WA Treasurer Eric Ripper says growth has been driven by a huge surge in business investment. (ABC)

Map: Perth 6000
New figures reveal Western Australia's economy is growing much faster than previously thought.

The Treasurer Eric Ripper says economic growth is now estimated at 7 per cent, an increase of 2.5 per cent on the forecast delivered in the State Budget in May.

Mr Ripper says growth has been driven by a huge surge in business investment which is growing four-and-a-half times faster than previously forecast.

"There are massive expansions in the iron ore industry, there's the new Pluto LNG project and the significant construction going on in the central business district," he said.

The figures have fuelled expectations the Government will significantly increase its budget surplus forecast at next week's mid-year review.

Mr Ripper says while the strong growth is creating more revenue for the State Government, there are also higher costs and timeline blowouts for infrastructure projects.

The Chief Executive of the Chamber of Commerce and Industry, John Langoulant, says the figures confirm the chamber's positive outlook for the WA economy but it is crucial the Government keeps a check on inflationary pressures.

"We can see it in our labour costs, we can see it in the costs of other resources and the cost of raw materials in the building industry," he said.

"They're the pressures which the Government needs to look at to free up the markets, to make sure we've got enough people coming into the economy and make sure we've got enough resources available to put into this infrastructure."

Mr Langoulant says the growth figures confirm there will be a huge demand for labour in WA for several years to come.

"Where the Federal Government and State Government need to work together is in ensuring that we've got enough people coming from offshore into our economy, enough immigration, and that we've got enough people who are prepared to move interstate into our economy to fill the jobs which are now emerging at a pace," he said.