Confidence has returned to the market on the back of solid price rises in iron ore, according to the Chamber of Minerals and Energy of Western Australia’s (CME) latest edition of the WA Resources and Economics Report, prepared in conjunction with KPMG.
At the conclusion of the September 2012 quarter, we saw falling commodity prices affecting the overall conditions of the Western Australian economy. Whilst prices in the December 2012 quarter have not returned to their record highs, we have seen an improvement in overall economic conditions.
Western Australia enjoyed the highest year-on-year growth across Australia in employment to November 2012 at 4.7 per cent. The national figure for the same period was considerably more modest at just 1.1 per cent, highlighting once again the contribution of Western Australia to the national economy.
According to the NAB’s October 2012 Monthly Business Survey, overall business conditions remained the strongest in Western Australia compared to the rest of the nation. This indicates the moderation in commodity prices over recent months has not yet had a significant impact on Western Australia’s overall economy
“Notwithstanding the softening of prices towards the end of last year, WA and the wider economy continues to benefit from the growth the in resources sector. Ongoing investment and growth is maintaining record levels of employment in WA,” CME Chief Executive, Reg Howard-Smith said.
Other key findings in the December 2012 WA Resources and Economic Report:
- The latest ABS September quarter national accounts reflect a 0.5 per cent increase in GDP during the September quarter, putting year-on-year GDP growth at 3.1 per cent.
- As at October 2012, committed capital expenditure on major projects in Western Australia increased by 4.1 per cent to $141 billion from the $135 billion at the end of April 2012.
- Western Australian resources companies total market capitalisation at the end of November 2012 stood at $86 billion, an increase of 2.1 per cent from the end of August 2012.
- National accounts show Australia’s terms of trade continue to decline, falling 4.0 per cent in the September quarter.
- September quarter saw increases in production for iron ore and copper but falls in production for gold, nickel and titanium minerals.
The December report also features an interview with Mr Graham Ehm, Executive Vice President – Australasia, AngloGold Ashanti Limited, where he provides insights that further highlight the increased cost of doing business in Western Australia, how this has effected mine operations as well as touching on the impact of the relatively stable price of gold.