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1367.5 - Western Australian Statistical Indicators, Sep 2005  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/10/2005   
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FEATURE ARTICLE

The following feature article appears in detail in the publication.

YOUTH IN REGIONAL WESTERN AUSTRALIA


This article draws attention to the differing circumstances of young people residing in metropolitan Perth and those in selected regional areas. The article covers aspects of population, education, employment, living arrangements and cultural diversity.


OVERVIEW

ECONOMIC SUMMARY

The Western Australian domestic economy continued to grow at a steady pace, with state final demand (trend chain volume terms) rising by 1.4% in the June quarter 2005, following increases of 1.4% and 1.3% in the previous two quarters. Growth in the June quarter was mainly driven by public sector investment, up 30.2% ($273 million) in seasonally adjusted chain volume terms, with state and local public corporations contributing most to the rise (70.0%). Expenditure by households also rose during the quarter, up 1.5% ($175 million), mainly on food, recreation and culture, rent and other dwelling services and hotels, cafes and restaurants. Offsetting a large proportion of growth in the June quarter was business investment, which declined by 4.4% (or $179 million), with expenditure on machinery and equipment and non-dwelling construction accounting for the entire fall. The decline in business investment, however, comes after a sustained period of strong growth and remains at a high level by historical standards.


The value of Western Australia's exports rose by 29.4% between the June quarters of 2004 and 2005, climbing to its highest quarterly level on record ($10,906 million). Driving the increase were iron ore exports, which almost doubled in value over the period (up 92.6% or $1,373 million). Other notable gains were in exports of crude petroleum oils (up 81.3% or $650 million) and natural gas (up 64.6% or $337 million). Each of these commodities benefited from recent production capacity expansions and higher global prices. The main detractor from the state's export growth was wheat, which declined in value by 52.1% ($312 million). Based on International Monetary Fund forecasts, the outlook for Western Australia's exports is positive for 2006, with economic conditions expected to either improve or remain strong in the state's major export markets. Growth in the Japanese economy is forecast to more than double to 1.9% in 2006, supported by anticipated growth of 3.6% in the United States economy. The rapid expansion of China and India is expected to continue in 2006, although at a slightly lower rate, with China forecast to grow by 8.0% and India by 6.4%. Growth in newly industrialised Asian economies (including Hong Kong SAR, the Republic of Korea, Singapore and Taiwan) is also expected to accelerate in 2006, from 4.0% in 2005 to 4.8% in 2006.


Sustained high levels of economic activity in Western Australia's domestic economy and strong growth in resource sector exports have flowed into the state's labour market. Full-time employment rose by 1.5% (11,000 persons) over the three months to August 2005, as the number of unemployed persons fell by 2.1% (1,100 persons) and participation in the labour force rose from 68.0% to 68.4% of the state's civilian population aged 15 years and over. As a result, the unemployment rate reached a record low in August 2005, falling to 4.6% from 4.8% in May 2005.


The estimated resident population of Western Australia increased by 9,838 persons in the March quarter 2005 to surpass 2 million persons. Net overseas migration contributed 5,701 new residents while natural increase (3,595 persons) and net interstate migration (542 persons) made up the balance of the population increase.



STATE ACCOUNTS

State final demand

State final demand (trend chain volume terms) in Western Australia continued to grow at a steady pace, rising by 1.4% ($303 million) in the June quarter 2005, following increases of 1.4% and 1.3% in the previous two quarters. In comparison, national domestic final demand increased by 1.0% in the June quarter 2005.

STATE FINAL DEMAND, Chain volume measures - Change from previous quarter
Graph: STATE FINAL DEMAND, Chain volume measures—Change from previous quarter



In seasonally adjusted chain volume terms, state final demand in Western Australia increased by 2.0% ($444 million) in the June quarter 2005, driven by increases in government investment and government consumption expenditure, as well as steady gains in household spending. The largest contributor to growth during the quarter was gross fixed capital formation by state and local public corporations, increasing by 42.0% ($191 million), mainly due to increased investment expenditure by electricity and water utilities. General government investment also rose over the period, up 18.4% ($83 million). Final consumption expenditure by households and government increased by 1.5% ($175 million) and 3.2% ($109 million) respectively during the quarter. Household spending gains were mostly on food, recreation and culture, rent and other dwelling services and hotels, cafes and restaurants.


The main detractor from growth in state final demand in the June quarter 2005 was business investment, which decreased by 4.4% ($179 million). The decline was mostly driven by large falls in investment on machinery and equipment, which was down by 7.0% or $143 million. The strength of investment activity in the mining sector was offset by weaker investment in other sectors, notably non-dwelling construction (down by 4.5% or $68 million) which was mainly due to a decrease in engineering construction.



PRICES

Consumer Price Index

Perth's Consumer Price Index (CPI) rose by 1.3% in the June quarter 2005, following an increase of 0.8% in the previous quarter. Prices growth in Perth was more than double the national average of 0.6% in the June quarter, mainly due to above average increases for food, housing and household furnishings, supplies and services.


The main contributor to Perth's CPI growth was housing, which increased by 2.1% in the June quarter 2005, largely due to the continued rise in house purchase prices. In comparison, the cost of housing rose by only 0.6% nationally over the period, aided by falling house prices in Sydney and Melbourne. Other notable contributions to Perth's CPI growth included transportation (up 1.9%), driven by rising automotive fuel prices; food (up 1.4%), mainly due to increased prices of vegetables and dairy and related products; and household furnishings, supplies and services (up 3.1%), mostly due to the end of widespread discounting associated with post-Christmas sales.


The only detractors from prices growth in Perth in the June quarter 2005 were recreation (down 0.6%), due to a fall in domestic holiday travel and accommodation; and communication (down 0.9%).

Consumer price index (all groups), Change from same quarter previous year
Graph: CONSUMER PRICE INDEX (ALL GROUPS) Percentage change from corresponding quarter of previous year



Between the June quarters of 2004 and 2005 Perth's CPI rose by 3.8%. Nationally, the CPI rose by 2.5% over the same period - within the Reserve Bank of Australia's (RBA) target range of 2.0%-3.0%. The RBA expects recent increases in international oil prices to exert some upward pressure on producer and consumer prices in the September quarter 2005. However, it also anticipates that the slower pace of domestic demand this year will have a moderating effect on consumer price increases.


Wage Price Index

Wages in Western Australia grew faster than the national average in the June quarter 2005, with the quarterly index of total hourly rates of pay (excluding bonuses) for the state rising by 1.0%, compared to an increase of 0.7% nationally. Western Australia's growth in wages was the highest of all states and territories during the quarter.


Selected industries recording the largest wages growth in Western Australia during the June quarter 2005 were government administration and defence (up 1.8%), education (up 1.7%) and mining (up 1.5%). Among selected occupations, the highest quarterly growth was recorded by intermediate production and transport workers (up 1.4%), professionals (up 1.3%) and managers and administrators (up 1.2%).

Wage price index, Change from same quarter previous year
Graph: Wage Price Index ( WPI ): Indexes by Australia, States and Territories by Sector (Sep 1997 - onwards)



Western Australia recorded wages growth of 5.0% between the June quarters of 2004 and 2005. This result was well above the national increase of 4.1%, and the highest rate of any state or territory - reflecting the relative strength of the state's economy and associated high levels of demand for labour over the period. The selected industries showing the largest annual growth in wages were construction (up 13.4%), government administration and defence (up 6.1%) and mining (up 5.7%). Labourers and related workers (up 8.0%) and tradespersons and related workers (up 7.6%) recorded the highest annual wages growth among the selected occupations.



CONSUMPTION

New motor vehicle sales

Sales of new motor vehicles (trend) in Western Australia increased for the seventh consecutive month in August 2005, rising by 1.5% to 8,429 vehicles. Strong consumer confidence, a high Australian dollar and the effect of tariff reductions in January 2005 on import prices have driven the state's vehicle sales to historically high levels.

New motor vehicle sales
Graph: New Motor Vehicle Sales: by Passenger, Sports Utility and Other, Monthly from Jan 1994



In the three months to August 2005, sales of new motor vehicles in Western Australia rose by 3.1% (757 vehicles) compared to the previous three month period, while national motor vehicle sales declined by 0.5% over the same period. Sales of other vehicles (including vans, trucks and buses) increased by 6.5% (345 vehicles), accounting for almost half of the total increase (45.6%). Passenger vehicles sales increased by 2.0% (278 vehicles) and sales of sports utility vehicles rose by 2.9% (134 vehicles), with Western Australia the only state or territory to record an increase in sports utility vehicle sales.


Retail trade

Western Australia's retail turnover (trend) increased by 2.7% in the three months to July 2005, compared to the previous three month period - more than double the increase recorded nationally (1.3%). The recent upturn in Western Australian retail sales has coincided with rising levels of household wealth associated with continued house price growth in Perth, easing expectations over interest rate increases and strong employment growth.

Monthly retail turnover, Current prices
Graph: RETAIL TURNOVER Current prices



The main industry groups driving Western Australia's increase in retail turnover over the three months to July 2005 were food retailing (up $83 million or 3.9%), hospitality and services (up $26 million or 4.2%) and household goods retailing (up $14 million or 1.6%). These increases were partly offset by a $13 million (2.6%) decline in other retailing (which includes pharmaceuticals, cosmetics, antiques, garden supplies and jewellery).



INVESTMENT AND FINANCE

Private new capital expenditure

Growth in business investment (trend chain volume terms) eased to 1.6% (or $39 million) in Western Australia in the June quarter 2005, following increases of 3.6% and 5.7% in the previous two quarters. Investment growth slowed for buildings and structures, down from 4.9% ($58 million) to 2.0% ($25 million); and equipment, plant and machinery, down from 2.2% ($28 million) to 0.3% ($4 million), in the June quarter. Despite the deceleration, business investment still remains at record high levels in Western Australia ($2,553 million), with investment in equipment, plant and machinery ($1,286 million) and buildings and structures ($1,258 million) contributing almost equally to the total.

PRIVATE NEW CAPITAL EXPENDITURE, Chain volume measures
Graph: PRIVATE NEW CAPITAL EXPENDITURE, Chain volume measures



In original current price terms, business investment in Western Australia rose by 15.6% ($356 million) in the June quarter 2005, compared to the same quarter of 2004. Over the period, investment was driven by the industries of mining (up 26.3% or $321 million) and manufacturing (up 29.7% or $93 million), while other selected industries (comprising retail trade, construction, and property and business services) detracted marginally from growth (down 7.9% or $59 million). Much of the rise in business investment can be attributed to the recent expansion in the state's resources sector, which includes mining and the downstream mineral processing activities of the manufacturing industry. Of the $2,632 million of business investment in Western Australia during the June quarter, 58.5% ($1,541 million) was attributable to the mining industry while 15.4% ($406 million) came from the manufacturing industry.


Housing finance commitments

In Western Australia, the number of housing finance commitments for owner occupation (trend) rose by 3.1% (713 commitments) in the three months to July 2005, compared to the previous three month period. In contrast, national housing finance commitments fell by 0.1% over the same period. The number of housing finance commitments in Western Australia rose to 7,871 in July 2005, the highest level recorded since the monthly series began in 1985.


In original terms, the number of housing finance commitments (owner occupation) in Western Australia rose by 20.5% (4,161 commitments) in the three months to July 2005, compared to the equivalent period of 2004. The increase was driven by both non-first home buyers (up 17.9% or 3,090 commitments) and first home buyers (up 35.0% or 1,071 commitments), with first home buyers benefiting from stamp duty concessions introduced in July 2004.

Housing finance commitments, Number of dwellings financed
Graph: Housing Finance for Owner Occupation: Original, Seasonally Adjusted, Trend: October 1975 Onwards



The total value of housing finance commitments for owner occupation (trend) in Western Australia increased by 6.0% ($236 million) in the three months to July 2005, compared to the previous three months. Nationally, the total value of housing finance rose by 0.5% over the same period. In original terms, the value of housing finance in Western Australia rose by 34.1% ($1,113 million) in the three months to July 2005, compared to the corresponding period of 2004. The increase over the period was mainly driven by finance commitments for the purchase of new and other established dwellings, up 39.2% ($769 million). Refinancing of established dwellings also grew strongly over the period (up 37.3% or $289 million).


The total value of housing finance for the construction of new dwellings (original) in Western Australia rose by 11.9% ($70 million) in the three months to July 2005, compared to the previous three months. The increase was driven by both owner occupiers (up 12.4% or $65 million) and investors (up 8.3% or $6 million) over the period. Based on this growth, the level of housing construction activity can be expected to rise, or at least be maintained, until early 2006.



CONSTRUCTION

Building approvals

The number of houses approved (trend) for construction in Western Australia fell by 0.9% (47 approvals) in the three months to July 2005, compared to the previous three month period. Nationally, the number of house approvals rose by 4.5% over the same period. Monthly house approvals in Western Australia have moderated since peaking in February 2005 (1,696 approvals), but still remained at a high level in July 2005 (1,672 approvals). Despite the indication of a slowing in house construction activity in the second half of 2005, the high volume of houses still being approved for construction in Western Australia suggest building activity should remain high for the remainder of 2005.

NUMBER OF DWELLINGS APPROVED, Houses: Trend
Graph: NUMBER OF DWELLINGS APPROVED, Houses: Trend



In current price terms, the value of new houses approved in Western Australia rose by 22.9% ($182 million) in the three months to July 2005, from the previous three month period. Nationally, the value of new house approvals increased by 18.7% over the same period. Growth in new house approvals in Western Australia, coupled with an increase in the value of new residential building construction yet to be done at the end of the March quarter 2005 (up 4.5% to $1,721 million), further supports the likely continuation of high levels of building activity in the housing sector for the rest of 2005 and into 2006.



TRADE

The value of Western Australia's trade surplus rose by 27.9% between the June quarters of 2004 and 2005, to reach $7,003 million - the largest surplus recorded since the December quarter 2000 ($6,001 million). The increase was driven by strong exports growth, up $2,480 million, bolstered by recent capacity increases in the resources sector and higher international commodity prices. Imports also grew over the period (up $954 million), supported by high levels of consumer confidence and business investment, as well as a strong domestic currency.

VALUE OF WESTERN AUSTRALIA'S TRADE SURPLUS, Change from same quarter previous year
Graph: VALUE OF WESTERN AUSTRALIA'S TRADE SURPLUS, Change from same quarter previous year



Western Australia's trade surplus with China almost doubled (85.5%) to $1,990 million between the June quarters of 2004 and 2005, largely due to an increase in iron ore exports. The state's trade position with Japan also improved considerably, with the surplus increasing by 45.4% to $2,108 million. In contrast, the state's balance of trade with the United Kingdom fell from a surplus of $121 million to a deficit of $89 million, due to a large fall in non-monetary gold exports, while increased petroleum imports from Saudi Arabia saw the state's deficit with that country rise substantially from $14 million to $367 million.


Exports

The value of Western Australia's exports rose by 29.4% between the June quarters of 2004 and 2005, climbing to its highest level ($10,906 million) since the quarterly series began in March 1988. Driving the increase were iron ore exports, which almost doubled in value over the period, up $1,373 million (92.6%). Growth in the value of iron ore exports was aided by a 71.5% price rise negotiated with Japanese steel mills (taking effect in April 2005), as well as strong growth in export volumes (up 21.6%) over the year. Other notable drivers were exports of crude petroleum oils (up $650 million or 81.3%) and exports of natural gas (up $337 million or 64.6%), both driven by price increases and higher production volumes. The main detractor from the state's export growth over the period was a decline in the value of wheat exports - down $312 million (52.1%) from record high levels in mid-2004.


Imports

The value of Western Australian imports increased between the June quarters of 2004 and 2005, rising by 32.4% to $3,903 million. The main commodity imported was crude petroleum oils, which more than doubled (up $309 million or 131.6%) over the period, as a result of historically high oil prices and a solid increase (up 73.5%) in volumes imported. Other major contributors were non-monetary gold (up $155 million or 33.6%), power generating equipment (up $75 million or 107.5%) and road vehicles (up $65 million or 15.4%).



MINING

Mineral and petroleum exploration expenditure

Mineral exploration expenditure (trend) in Western Australia rose by 3.4% ($5 million) in the June quarter 2005, reaching the highest level of expenditure since the March quarter 1998 ($161 million). Expenditure on mineral exploration has now increased for thirteen consecutive quarters, resulting in the longest period of growth since the quarterly series began in the September quarter 1988. Strong global demand for raw materials and high commodity prices continue to be the major drivers of growth in mineral exploration expenditure in the state.

Mineral exploration expenditure, Total minerals
Graph: Mineral exploration expenditure Total minerals



In original terms, Western Australia's mineral exploration expenditure rose by 20.3% ($28 million) in the June quarter 2005, compared to the same quarter of 2004. The main driver of growth over the period was expenditure on iron ore exploration, up 136.1% ($26 million) as a result of strong demand from China and Japan, as well as higher world prices. Nickel and cobalt exploration expenditure also rose over the period, up 75.6% ($18 million), driven by strong demand from Chinese stainless steel producers. A fall was recorded in expenditure on gold exploration (down 22.8% or $19 million), reflecting the decrease in domestic gold prices since 2003 and rising industry input costs such as labour and fuel.


Petroleum exploration in Western Australia remains below the high levels experienced in mid-2004. Expenditure on petroleum exploration (original) fell by 34.5% ($68 million) in the June quarter 2005, compared to the June quarter 2004, when it peaked at $198 million. Despite the decline, the level of petroleum exploration expenditure in the June quarter ($129 million) was just below the five year average of $143 million.


Mineral and energy production

Almost all of Western Australia's major mineral and energy commodities recorded production increases in the June quarter 2005, compared to the corresponding quarter of 2004. The largest increase over the period was in diamond production, rising 255.0%, as a result of production at the Argyle mine returning to normal levels following processing of lower grade ore in the comparable period of 2004. Zinc production doubled from a very low level in June 2004, supported by the recovery in international demand and prices since mid-2004. Significant production increases were recorded in the energy commodities of crude oil (up 22.7%) and natural gas (up 17.6%), driven by a substantial rise in world oil prices during the year.



TOURISM

Short-term arrivals on holiday

A total of 51,400 overseas visitors arrived in Western Australia by air on holiday in the three months to June 2005 - 6,353 (14.1%) more than in the same period of 2004. The number of visitors arriving from Singapore increased by 7,200 (80.4%) over the period, which more than offset decreases from a number of other countries, most notably the United Kingdom and Ireland (down 1,277 or 15.9%) and Thailand (down 564 or 28.4%).


In 2004-05, 245,156 overseas visitors arrived by air on holiday in Western Australia - an increase of 13,962 (6.0%) on the number of arrivals in 2003-04, mainly from Singapore, New Zealand and Japan.

SHORT-TERM VISITOR ARRIVALS AND RESIDENT DEPARTURES OVERSEAS, By air on holiday
Graph: SHORT-TERM VISITOR ARRIVALS AND RESIDENT DEPARTURES OVERSEAS, By air on holiday



Short-term departures on holiday

The number of Western Australian residents departing by air on holiday increased to 73,453 in the three months to June 2005 - 5,991 (8.9%) more than in the same period of 2004. Notable increases in resident departures were to Singapore (up 2,797 or 74.0%), Indonesia (up 2,443 or 10.6%) and Malaysia (up 1,030 or 30.9%). The largest fall in resident departures was to Thailand (down 749 or 14.8%).


Over 2004-05, there were 279,353 short-term resident departures overseas on holiday from Western Australia - 53,471 (23.7%) more than in the previous year. The increase was largely driven by West Australians holidaying in South-east Asia, with Indonesia, Singapore, Malaysia and Thailand accounting for over two thirds of the rise in total overseas holiday travel. Growth in resident departures over the year was aided by a strengthening Australian dollar and rising incomes and employment in the state.



LABOUR MARKET

Employment

Western Australia's labour market continued to perform strongly over the three months to August 2005, with the number of employed persons (trend) increasing by 1.1% (11,671 persons) - above the national increase of 0.7%. The number of persons employed full-time rose by 1.5% (10,959 persons) over the three months to August 2005, with males accounting for most of the increase (58.3%). In the year to August 2005, full-time employment in Western Australia grew by 7.7% (53,328 persons), with female full-time employment increasing slightly faster (8.4%) than male (7.3%).

Employed persons, Total
Graph: NUMBER OF EMPLOYED PERSONS



Industry employment

Employment growth in Western Australia was spread across a number of industries over the twelve months to August 2005. The largest increase was recorded by the construction industry, with the number of employed persons rising by 16,795 (20.1%) over the period. Other industries to record strong employment growth were health and community services (up 16,709 persons or 18.6%), agriculture, forestry and fishing (up 13,348 persons or 30.8%), education (up 11,643 persons or 17.1%) and mining (up 10,871 persons or 29.5%). The main industries to record decreases in employment over the twelve months to August 2005 were wholesale trade (down 11,364 persons or 22.3%) and manufacturing (down 8,285 persons or 8.5%).


Unemployment

The number of unemployed persons (trend) in Western Australia decreased by 2.0% (1,047 persons) over the three months to August 2005 - more than the national decrease of 1.3%. The fall in unemployment occurred as strong job growth absorbed an increase in the number of Western Australians entering the labour market. The state's labour force rose by 10,624 persons between May and August 2005, increasing the labour force participation rate from 68.0% to 68.4% of the state's civilian population aged 15 years and over. In comparison, the national participation rate was 64.7% in August 2005.

Unemployment rate
Graph: UNEMPLOYMENT RATE



The decrease in the number of unemployed persons in Western Australia has seen the state's unemployment rate fall to a record low of 4.6% in August 2005, down from 4.8% in May 2005. Nationally, the unemployment rate decreased from 5.1% to 5.0% over the same period.

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