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Feature Article: State accounts: A snapshot of WA's economy in 2003-04
Recently released GSP figures for 2003-04 showed that the Western Australian economy recorded its strongest rate of growth on record. In 2003-04, Western Australia's chain volume (or real) GSP increased by 7.5% ($6,240 million) to $89,155 million, the fastest rate of growth of all states and territories. Western Australia, along with Queensland (5.1%) and South Australia (4.3%), were the only states to experience growth rates stronger than that in Australia's Gross Domestic Product (3.8%).
GROSS STATE PRODUCT, Chain volume measures(a)(b)
GSP PER CAPITA
Western Australia also recorded a faster rate of growth in GSP volume per capita than any other state or territory in 2003-04. Chain volume (or real) GSP per capita provides a picture of how much better off each member of the community has become over a period of time. In 2003-04, real GSP per capita increased by 5.8% in Western Australia, followed by 3.7% in South Australia and 2.7% in Queensland, and compared with growth of 2.5% nationally. Each person's share of real GSP in Western Australia rose by $2,488 to $45,277 in 2003-04. This share of real GSP was the highest of all states in 2003-04, ahead of Victoria ($40,650) and New South Wales ($40,242), but below the shares recorded in the Australian Capital Territory ($47,255) and Northern Territory ($46,356).
EXPENDITURE COMPONENTS OF GSP
Growth in the Western Australia economy in 2003-04 was driven by strong domestic demand, with only modest gains coming from the state's net trade result (up 0.9% or $210 million). State Final Demand (chain volumes) in Western Australia increased by 8.0% ($6,048 million) in 2003-04, primarily due to large increases in consumer spending and
FINAL CONSUMPTION EXPENDITURE
Household final consumption expenditure made the largest contribution to GSP growth in Western Australia in 2003-04, increasing by 6.8% ($2,789 million). This increase was the third highest among all states and territories, behind Queensland (8.8%) and Tasmania (8.1%). Western Australian households increased their expenditure on Recreation and culture by $749 million (16.0%), Furnishings and other household equipment by $480 million (19.1%) and Transport by $393 million (8.0%). Government final consumption expenditure also rose in Western Australia by $382 million (3.0%) in 2003-04.
EXPENDITURE COMPONENTS OF GSP, Western Australia - Chain volume measures(a)
GROSS FIXED CAPITAL FORMATION
In 2003-04, Western Australia experienced strong volume growth in Private gross fixed capital formation, rising by 11.9% ($2,269 million), the second largest increase of all states and territories behind Tasmania (16.7%). Nearly all of this increase was attributable to business investment on Machinery and equipment (up $2,040 million or 31.7%), supported by a strong $A and the expansion of the state's resources industry. Business investment was
also strong in Intangible fixed assets (comprising exploration expenditure and computer software) (up $124 million or 7.9%) and Livestock (up $52 million or 46.8%). Detracting from private sector growth in 2003-04 was Dwelling investment, down marginally ($31 million or 0.7%) from high levels in 2002-03. Public sector gross fixed capital formation in Western Australia rose by 22.0% ($608 million) in 2003-04, ranked second behind the Australian Capital Territory (up 26.0%).
INDUSTRY COMPOSITION OF TOTAL FACTOR INCOME
Total Factor Income (TFI) in current price terms is that part of the cost of producing GSP which consists of gross payments to the factors of production (labour and capital). It represents the value added by these factors in the process of production and is equivalent to GSP less taxes, plus subsidies on production and imports. In 2003-04, TFI grew by 6.8% ($5,060 million) in Western Australia. Total Factor Incomes grew in all Western Australian industries in 2003-04, except Mining (down 3.0% or $443 million).
The main industry contributing to 2003-04 TFI growth in Western Australia was Agriculture, forestry and fishing (up 62.5% or $1,423 million), which rebounded strongly from the 2002-03 drought. Other contributors were Property and business services (up 9.7% or $718 million), Construction (up 8.3% or $499 million) and Manufacturing (up 5.9% or $402 million). Growth in property services and construction were largely attributable to the high level of activity in the state's property market in 2003-04. The manufacturing industry, which includes downstream mineral processing, has benefited from the expansion of processing activities within the state's resources sector.
TOTAL FACTOR INCOME BY INDUSTRY AND PRINCIPAL COMPONENTS, Western Australia - Current prices
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