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1367.5 - Western Australian Statistical Indicators, Sep 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 08/10/2003   
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FEATURE ARTICLE

The following feature article appears in detail in the printed and electronic versions of the publication:


THE WINEMAKING INDUSTRY IN WESTERN AUSTRALIA

The winemaking industry in Western Australia has grown from humble beginnings to become an increasingly important industry for the state. It has experienced significant increases in wine production and exports over the last five years and is one of the fastest growing winemaking industries in the country.


SOCIAL TRENDS

The following article appears in detail in the printed and electronic versions of the publication:


EDUCATION, TRAINING AND WORK

Education and employment patterns in Western Australia have undergone dynamic change over the past 20-25 years. Major shifts in the labour market have occurred in terms of industry share, required skill levels, number of hours worked and the levels of part-time and full-time work, and employment arrangements. The demographic make-up of the labour force has also undergone many changes in this time.


OVERVIEW


STATE FINAL DEMAND

State final demand, in seasonally adjusted chain volume terms, increased in the June quarter 2003 by 3.7% ($690 million) to $19,168 million. The rise was the second highest recorded for all states and territories, with the Northern Territory recording the highest increase at 10.4%. The growth in Western Australia's state final demand in the June quarter 2003 followed a decline in demand of 0.5% in the March quarter 2003, and 3.4% growth in the December quarter 2002.

state final demand, chain volume measures - change from previous quarter



The main contributors to growth in state final demand for the June quarter 2003 were:
  • Private expenditure on Other buildings and structures - up $176 million (13.9%), mainly due to construction activities associated with the state's major resource projects;
  • Private expenditure on Machinery and equipment - up $161 million (10.5%), reflecting the commencement of large investment projects in the state and the strong $A; and
  • Household final consumption expenditure - up $126 million (1.2%), attributable to strong growth in both retail trade and new motor vehicle sales.

The only decline was in private expenditure on Intangible fixed assets, down by $16 million (3.9%).

In seasonally adjusted chain volume terms, state final demand was 9.3% ($1,629 million) higher in the June quarter 2003 than in the June quarter 2002. The most notable increases were in private investment on Other buildings and structures, up by $653 million (82.9%); Household final consumption expenditure, up by $328 million (3.3%); and Machinery and equipment, up by $170 million (11.2%).


CONSUMER PRICE INDEX

Perth's consumer price index (CPI) was unchanged in the June quarter 2003, following a 0.7% rise in the March quarter 2003. Prices remained flat both in Perth and nationally during this period due to a reduction in oil prices and an easing of drought conditions. Prices were also affected by the appreciation of the $A which reduced the cost of imports.

Major price increases in Perth's CPI for the June quarter 2003 were in:
  • Hospital and medical services - up 3.1%; and
  • House purchase - up 2.6%.

Offsetting price decreases came mainly from:
  • Automotive fuel - down 9.4%;
  • Fruit - down 4.5%; and
  • Overseas holiday travel and accommodation - down 3.7%.

consumer price index (all groups), Perth, change over corresponding quarter of previous year


Over the 12 months to June 2003, Perth's CPI increased by 2.1%, equal with Darwin as the lowest annual increase of the eight capital cities. Nationally, the CPI rose by 2.7% over the year to June - which is within the Reserve Bank of Australia's 2-3% target range. Growth in the CPI in 2002-03 was mostly driven by rising house prices and higher food prices associated with the impact of the drought.


WAGE COST INDEX

The quarterly index of total hourly rates of pay excluding bonuses for Western Australia increased by 0.5% in the June quarter 2003, compared to growth of 0.6% nationally. While movements in the wage cost index are traditionally low in the June quarter, growth in the June quarter 2003 was the equal lowest since the series commenced.

Over the 12 months to June 2003, wages in Western Australia grew by 3.5%, marginally below the national average of 3.6%. Annual wages growth ranged from a high of 3.9% in New South Wales and South Australia to a low of 3.1% in the Northern Territory.

wage cost index, change over corresponding quarter of previous year



Of the selected industries in Western Australia, Property and business services showed the highest quarterly wages growth (2.0%) in the June quarter 2003. The lowest increases in wages were for Mining, Manufacturing and Government administration and defence, all of which recorded growth of 0.2%. Property and business services recorded the highest annual growth in wages at 4.6%, while Retail trade recorded the lowest annual growth of 1.8%.

Professionals (1.0%) and Associate professionals (0.9%) had the highest quarterly wages growth of the selected occupations in the June quarter 2003. Despite showing one of the lowest quarterly movements in the June quarter 2003 at 0.3%, Labourers and related workers recorded the highest annual wages growth of the selected occupations at 5.2%.


CONSUMPTION


NEW MOTOR VEHICLE SALES

In the three months to August 2003, new motor vehicle sales in Western Australia (trend) totalled 21,625, an increase of 7.2% (1,448 vehicles), compared to the three months to May 2003. The increase was mainly in other vehicles, up by 10.9% (844 vehicles), reflecting strong sales of four-wheel drive vehicles. Sales of passenger vehicles were also up by 4.9% (604 vehicles). Over this three month period, new motor vehicle sales in Western Australia increased at an average monthly rate of 2.1%, compared to 1.3% nationally.

new motor vehicle sales


Sales of new motor vehicles (original) in the 2002-03 financial year totalled 76,673 - an increase of 6.6% (4,728 vehicles), compared to sales in 2001-02. Growth was strongest for sales of other vehicles, up by 12.5% (3,260 vehicles); with passenger vehicle sales increasing by 3.2% (1,468 vehicles).


RETAIL TRADE

Retail turnover in Western Australia (trend) rose by $108.0 million (2.5%) in the three months to July 2003, compared to the three months to April 2003. The increase in retail turnover was supported by increased household goods consumption, as a result of strong housing market activity. Monthly growth in retail turnover in Western Australia, during the three months to July 2003, averaged 1.0% compared to 0.7% nationally.

monthly retail turnover



The main industry groups contributing to retail growth in the three months to July 2003, compared to the three months to April 2003, were:
  • Household goods retailing - up $34.9 million (5.8%);
  • Food retailing - up $28.8 million (1.5%);
  • Other goods retailing - up $18.3 million (4.8%); and
  • Department stores retailing - up $10.8 million (2.9%).

Recreational goods retailing was the only industry group to record a decrease - down by $4.8 million (2.3%).

In trend chain volume terms, Western Australia's retail turnover for the June quarter 2003 rose by 0.9% to $4,213.0 million, an increase of 3.0% over the June quarter 2002.


PRIVATE NEW CAPITAL EXPENDITURE

Business investment in Western Australia in trend chain volume terms rose by $89 million (4.8%) to $1,937 million in the June quarter 2003. The appreciating $A has increased the volume of imports, contributing to strong growth in private new capital expenditure. During the June quarter 2003, increases in business investment were recorded in both:
  • Equipment, plant and machinery - up $41 million to $1,126 million; and
  • Buildings and structures - up $33 million to $798 million.

private new capital expenditure


In original current price terms, business investment in Western Australia increased by $1,162 million (19.4%) to $7,156 million in 2002-03. Contributing to the rise were increased investments in:
  • Mining - up $811 million to $3,902 million;
  • Manufacturing - up $221 million to $981 million; and
  • Other selected industries (including Retail trade, Property and business services and Construction) - up $131 million to $2,274 million.

According to the Western Australian Department of Treasury and Finance, the outlook for business investment in Western Australia in 2003-04 remains positive, aided by a number of large projects currently underway. These projects include the $630 million Oswal Fertilisers ammonia plant, the $975 million Newcrest Mining Telfer Deeps gold mine expansion, the $400 million HIsmelt pig iron plant and the installation of the $800 million second trunkline associated with the fourth LNG train expansion of the North West Shelf.


CONSTRUCTION


BUILDING APPROVALS

A total of 5,330 new houses were approved in Western Australia (original) in the three months to July 2003, 1,353 houses (34.0%) more than in the previous three months to April. The significant increase can be partly attributed to the introduction of new energy efficient building codes in Western Australia on 1 July 2003, which had a pull-forward effect on building approvals. In June 2003, the number of new houses approved in Western Australia increased by 393 houses (24.0%) to 2,033, the highest number of new houses approved since November 1999 (2,055).




In the three months to July 2003, the value of building approved for new houses increased by $219 million (38.4%), compared to the previous three months to April. Over the same period, the value of non-residential building approvals rose by $40.6 million (13.9%).

In original chain volume terms, the value of both new house approvals and non-residential approvals were $83.6 million and $49.6 million higher in the June quarter 2003, compared to the June quarter 2002. The value of total building activity was $4,675.9 million in 2002-03, $837.8 million higher than 2001-02, reflecting the buoyant housing market supported by low interest rates.


FINANCE

The number of housing finance commitments (trend) in Western Australia rose for the seventh consecutive month in July 2003, increasing by 203 dwellings (2.9%) to 7,319. Since January 2003, the growth in commitments has averaged 170 dwellings (2.6%) per month. The total value of housing finance commitments also increased over this period, up by an average of $32 million (3.4%) per month.

housing finance commitments, number of dwellings financed



In original terms, the number of housing finance commitments in the three months to July 2003 rose by 3,391 dwellings (17.8%), compared to the three months to April 2003. Dwellings financed by non-first home buyers contributed most to the rise, increasing by 3,094 dwellings (19.3%), while dwellings financed by first home buyers increased by 297 dwellings (9.7%).

The continued boom in house prices has had a distinct impact on the size of borrowing for housing. The average borrowing size for non-first home buyers rose from $134,200 in the three months to July 2002 to $148,300 in the three months to July 2003 - an increase of $14,100 (10.5%). Similarly, the average borrowing size for first home buyers rose from $123,500 to $141,600 over the same period - an increase of $18,100 (14.7%).


TRADE

Western Australia's trade surplus (original) was $5,067 million in the June quarter 2003, down by 2.8% from $5,213 million in the June quarter 2002. The reduced surplus was largely the result of strong growth in merchandise imports, which rose by $462 million (19.6%). Exports during this period increased by $316 million (4.2%). The state's trading activity in the June quarter 2003 continued to be affected by weak international economic growth, appreciation of the $A and the receding drought.

value of WA's merchandise trade



In financial year terms, the state's trade surplus was $20,621 million in 2002-03, $278 million below the 2001-02 surplus. The value of the state's exports in 2002-03 rose by $2,154 million (7.1%), largely supported by a rise in gold exports associated with increased gold refining activity. Over the same period, imports increased by $2,432 million (26.1%), also reflecting the heightened gold refining activity and growth in business investment.

EXPORTS

The major commodities contributing to the increase in value of Western Australia's exports in the June quarter 2003, compared to the June quarter 2002, were:
  • Non-monetary gold - up $382 million;
  • Gas, natural and manufactured - up $173 million;
  • Iron and steel - up $70 million; and
  • Transport equipment (excluding road vehicles) - up $55 million.

Partially offsetting export growth were decreases in the value of exports of:
  • Non-ferrous metals - down $253 million; and
  • Petroleum, petroleum products and related materials - down $120 million.

The value of exports from Western Australia to the United Kingdom increased to $934 million in the June quarter 2003, up by $297 million from the June quarter 2002. Increased exports were also recorded to India, up by $190 million to $251 million; and China, up by $136 million to $999 million. Decreases were recorded for the value of exports to the Republic of Korea, down by $346 million to $666 million; and to the United States of America, down by $91 million to $446 million.


IMPORTS

The major commodities contributing to the increase in the value of imports to Western Australia in the June quarter 2003, compared to the June quarter 2002, were:
  • Petroleum, petroleum products and related materials - up $176 million;
  • Medicinal and pharmaceutical products - up $89 million;
  • Iron and steel - up $62 million; and
  • Non-monetary gold - up $60 million.

Decreased imports into Western Australia were recorded for:
  • Transport equipment (excluding road vehicles) - down $28 million; and
  • Office machines and automatic data processing machines - down $26 million.

Compared with the June quarter 2002, imports into Western Australia in the June quarter 2003 increased from Italy, up by $110 million to $182 million; the United Arab Emirates, up by $82 million to $91 million; and Indonesia, up by $80 million to $330 million. The major decline in imports over the period was recorded from the Republic of Korea, down by $149 million to $84 million.


MINERAL AND PETROLEUM EXPLORATION

Western Australia's mineral exploration expenditure (original) for the June quarter 2003 was $111.6 million, an increase of $19.8 million (21.6%) over the corresponding quarter in 2002. Minerals contributing most to the increase were:
  • Nickel and cobalt - up $7.1 million to $17.7 million; and
  • Gold - up $7.8 million to $67.2 million.

Diamond exploration expenditure fell by $3.3 million to $3.8 million over the period.

mineral exploration expenditure, total minerals




Mineral exploration expenditure increased by 11.2% to $423.6 million in 2002-03, $42.5 million higher than 2001-02. The rise in mineral exploration expenditure over the period coincided with higher $US commodity prices, notably gold and nickel.

In the June quarter 2003, expenditure (original) on petroleum exploration was $151.3 million, $69.3 million (84.5%) higher than the June quarter 2002. Expenditure on petroleum exploration in 2002-03 increased by 24.7% to $598.3 million, $118.5 million more than in 2001-02.


MINERAL PRODUCTION

Minerals showing significant increases in production in the June quarter 2003 compared to the June quarter 2002 were:
  • Iron ore - up 20.9% (8,810,000 tonnes) to 51,044,000 tonnes;
  • Salt - up 14.8% (320,000 tonnes) to 2,481,000 tonnes; and
  • Bauxite - up 3.5% (313,000 tonnes) to 9,195,000 tonnes.

Decreases were recorded in the production of diamonds, which fell by 28.5% (2,396,000 carats) to 6,019,000 carats; and zinc, which fell by 9.1% (6,000 tonnes) to 60,000 tonnes.

Mineral production in Western Australia increased in 2002-03 compared to 2001-02. Substantial increases in production occurred for:
  • Salt - up 13.4% (1,132,000 tonnes) to 9,607,000 tonnes;
  • Iron ore - up 7.4% (13,292,000 tonnes) to 193,229,000 tonnes;
  • Ilmenite - up 6.2% (107,000 tonnes) to 1,828,000 tonnes; and
  • Diamonds - up 4.4% (1,339,000 carats) to 31,901,000 carats.

Only tin production decreased notably in 2002-03, down by 12.2% (84 tonnes) to 602 tonnes.


TOURISM

SHORT TERM ARRIVALS ON HOLIDAY

There were 5,141 fewer overseas visitors to Western Australia by air on holiday, in the three months to June 2003, than in the three months to June 2002. Contributing to the decline in international visitors to Western Australia were the strong $A and continuing global uncertainties associated with the severe acute respiratory syndrome virus and terrorism. Falls in arrivals were recorded for visitors from:
  • Japan - down 2,618 (43.8%);
  • Singapore - down 2,205 (17.7%); and
  • Thailand - down 1,482 (61.1%).

Partially offsetting the decline were increases in visitors from the United Kingdom and Ireland, up by 1,546 (23.9%).

Despite recent falls in overseas visitors, the number of short term visitor arrivals by air on holiday to Western Australia increased between 2001-02 and 2002-03 by 10,706 (5.2%). This was mainly due to increased arrivals from the United Kingdom and Ireland, up by 9,878 (22.9%).


SHORT TERM DEPARTURES ON HOLIDAY

Western Australian resident departures overseas by air on holiday decreased by 16,708 (32.1%) in the three months to June 2003, compared to the three months to June 2002. Major falls in resident departures were recorded for:
  • Indonesia - down 6,103 (38.0%); and
  • Singapore - down 3,797 (84.3%).

In 2002-03, there were 17,336 (8.9%) fewer short term resident departures by air on holiday than in 2001-02. The most notable decline was in the number of Western Australians departing overseas to Indonesia, which fell by 16,829 (26.5%), largely as a result of the Bali bombings.


THE LABOUR MARKET


EMPLOYMENT

The number of employed persons in Western Australia (trend) fell for the fourth successive month to 974,700 in August 2003. Since April 2003, the number of employed persons has decreased by 3,200 persons, mainly due to falls in the number of females employed part-time (down by 3,600) and males employed full-time (down by 4,200). The number of employed persons declined, during this period, for Western Australia and nationally at a rate of 0.1% per month.

employed persons



The total labour force in Western Australia stood at 1,036,900 in August 2003 - 200 persons less than in April 2003. The decrease resulted from a fall in male labour force participation (down by 1,200 persons).

INDUSTRY EMPLOYMENT

The majority of industries (original), in the three months to August 2003, experienced either low levels of growth or decreases in employment from the previous three months. Over this period, the largest employment growth occurred in the Construction industry (up by 5,600 persons), while significant decreases in employment were recorded for Mining, down by 5,400; Wholesale trade, down by 4,700; and Manufacturing, down by 4,200.


UNEMPLOYMENT

In Western Australia (trend), the number of unemployed persons increased for the fourth consecutive month in August 2003 to 62,200 - up by 3,000 from April 2003. The number of unemployed Western Australians increased at an average monthly rate of 1.3% over the period, in contrast to a 0.5% average monthly decrease at the national level.

The unemployment rate (trend) in Western Australia rose for the third consecutive month to 6.0% in August 2003, impacted on by an increase in the number of unemployed persons and declining labour force participation. The national unemployment rate in August 2003 was also 6.0%, but had fallen from 6.1% in July 2003 - a level that had been sustained since October 2002.

unemployment rate



In August 2003, there were 14,300 long-term unemployed persons in Western Australia (those who had been unemployed for 52 weeks or more since their last employment). This level increased by 1,400 persons compared to August 2002.

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