11th May 2006 
 
West Australia is in a strong position as a major player in the booming resources sector, which is generating growth in employment, higher salaries, increasing house prices and boosting retail sales according to Dr Ed Shann, Independent Economist speaking at the Perth Chartered Accountants Business Forum today.  
 
“West Australia is part of the sun belt states that are all strong in the resource sector. West Australia and Queensland are growing at a combined rate of eight per cent. The combined demand growth of the remaining states is at just three per cent due to the housing slump and sluggish retail spending,” Shann said.  
 
Perth is attracting population growth through rising employment opportunities that will continue to see an increase in house prices. Perth can expect to continue high growth rates at five per cent during 2007.  
 
Australia’s economic growth is being driven by a tug of war between housing and commodities. 2002 and 2003 saw a housing bubble boost domestic spending, which was replaced by a commodity price bubble when it burst 2004.  
 
Real growth has slowed since housing prices peaked, but the commodity boom has meant the world is pumping extra income into Australia at a rate of $40 billion a year.  
 
As a consequence:  

• The Australian dollar is above is longer term fair value
 

• BHP has earned our largest ever profit
 

• Resource stocks are near record highs
 

• Business investment is leaping
 

• The Federal surplus is strong