For me WA has been on my "watch out things could get tricky soon" list of states. One thing I hadn't really considered was that WA could actually be headed for a recession or actually in one.
From MB today..
http://www.macrobusiness.com.au/2013/06/gdp-in-detail-3/
Results were mixed at the state level, with final demand growing in NSW (+0.4%), Vic (+0.8%), and QLD (+0.6%), but falling in WA (-3.9%), SA (-0.3%), Tas (-1.0%), and the NT (-10.2%), and flat in the ACT. Western Australia, South Australia and Tasmania appear to be in recession, with each experiencing two or more consecutive quarters of negative growth in final demand (albeit different to GDP).
The resource sector contraction has barely started and yet WA appears to be experiencing serious economic head winds already. There's currently a FHB property surge driving markets here particularly Perth at the moment. I seriously doubt that the reality of WA's economic situation has even entered the consciousness of many of these buyers.
There's a reality check on the horizon for many and it will likely break a few piggy banks I'm thinking.
Geez – that news came out of nowhere.
As Tom has said it will be interested (or not) to see what the knock-on effect will be across the country and what response we get from the state government who, I might add seem to have been quiet with this piece of news.
As for real estate – might mean some of the heat gets taken out of the market and we can return to normality.
WA is already in a recession, I working for a shipping company and we move allot of freight for three large mining companies and I can tell you allot of these companies are shedding jobs and export volumes have slowed down.
Australia is going to be in a bad shape for quiet some time
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And the response from Federal Treasury.
http://au.news.yahoo.com/thewest/a/-/newshome/17499555/wa-not-in-recession-treasury/
My head hurts!
Derek wrote:And the response from Federal Treasury.http://au.news.yahoo.com/thewest/a/-/newshome/17499555/wa-not-in-recession-treasury/
My head hurts!
I tend to agree that the recession talk is over stated at the moment but this statement understates where things are going. All the feedback I get from people on the ground and in business here is that things are contracting rapidly. A mate has just done 2 trips to Xmas Creek (FMG) and one to Tom Price (Rio) with over size loads. 12 months ago there was a steady stream of trucks moving up and down between Perth and Port Hedland and all points in between. He said the roads where dead quite. Hardly anything moving at all. Maybe a tenth of what was moving last year.
Oldest lad in Port Hedland says they've been stuck on mostly 5 day weeks now for months. A lot of days they're knocking off at 3.30pm. 12 moths ago they couldn't get enough men. Now they've got too many and are just ticking over.
Some companies are starting to tell their FIFO workers to pay for their own flights.
I'm not sure the general public has woken up to how fast this thing happening. It's certainly way faster than I had expected. It'll be interesting to see where this thing settles and drops into a more stable environment.
Derek wrote:And the response from Federal Treasury.http://au.news.yahoo.com/thewest/a/-/newshome/17499555/wa-not-in-recession-treasury/
My head hurts!
.
So who is right and who has it wrong ?
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Dubstep wrote:So who is right and who has it wrong ? .Moot point I think. Fact is the economy is contracting on the whole and the boom states are contracting faster than most thought.
If WA is not in recession now then it's only a matter of time, however, a recession is only defined as a contractionary period. At some point that stops and economies stabilise (hopefully).
The opportunity is on the other side somewhere at sometime.
Things have slowed down.
Given we were running on all cylinders + a couple borrowed from other states a 'slow down' was probably inevitable.
Mind you some figures will be reviewed upwards/downwards/sideways (you choose) over the coming months when more detailed analysis will be done.
I notice Commsec had WA GROWING by 7.6% during the last quarter in this article http://www.perthnow.com.au/business/top-economist-wa-not-in-recession/story-fnhocr4x-1226658613073
Now to grab a Bex and lie down – my head is really hurting.
Derek wrote:I notice Commsec had WA GROWING by 7.6% during the last quarter in this article http://www.perthnow.com.au/business/top-economist-wa-not-in-recession/story-fnhocr4x-1226658613073
Pretty much another BS figure because it neglects imports. There's going to be a big turn around in figures which will make it difficult to interpret numbers. CAPEX is an import and coming off big time. Then we have a massive amount of ore production capacity coming online (exports) over the next 12 – 18 months.
The figure to watch will be WA unemployment and that's already jumped 1.7%. That may mask the real job loss numbers as people like me head out of state in search of greener pastures or a different lifestyle. That makes immigration numbers another stat to watch. Strangely WA gets most (98%) of its population growth from overseas not interstate.
i do beleive there will be a slow down in the western ausralian economy i work for cbi the biggest contractor for the gorgon project and have seen many other contractors reduce numbers and have seen and heardmany of many of the people in the mining industry made redundant… with the combination of bigger projects in wa being “puton hold” and the mining sector coming out of its construction phase were fewer numbers are needed a slow down in the economy is inevitable lets just hope it sorts itself out and lets wa off lightly
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