West Australia’s property markets are in for a hard time as the state’s economy is technically in a recession, according to the WA Chamber of Commerce, with the benefits of the impending mining boom yet to kick in.
The WA Chamber of Commerce and Industry’s chief economist John Nicolaou said the state’s domestic economy contracted for the second consecutive quarter at the end of 2010.
According to the chamber’s quarterly snapshot, the WA economy went backwards in the final three months of 2010 partly due to waning business investment.
Mr Nicolaou said the economy’s contraction was also due to initial construction work on some major projects winding up and the weak performance of the housing market.
“This was largely driven by many West Australians (being) reluctant to take on new debt, and first home buyers leaving the market following the end of the federal government’s stimulus program,” he said in a statement.
The state is also yet to see a “run of consistent job creation”.
In better news for the state, the economy benefited from a boost in exports and falling imports that helped WA reach a record high trade balance of $18 million.
“The longer term outlook is also positive with hopes still high that the much-awaited economic resurgence will kick in during the second half of the year,” he said.
The economy is expected to grow by 5.75 per cent next financial year due to significant levels of investment activity and higher export returns.
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