Investments in machinery, equipment and consumption up

05 Jul '06

3 min read

Australian Bureau of Statistics (ABS) announces growth in State Final Demand (trend chain volume measures) in Western Australia slowed to 2.7 in the March quarter 2006, from 3.0 in the previous quarter, mainly due to the impact of Tropical Cyclones Clare and Glenda on activity in the state's resources sector.

In seasonally adjusted chain volume terms, the largest declines were recorded in business investment on New engineering construction (down $75 million or 4.1) and Intangible fixed assets (down $23 million or 5.9), as well as private investment on Alterations and additions to dwellings (down $39 million or 6.2) during the quarter.

Offsetting these decreases were increases in business investment on Machinery and equipment (up $385 million or 12.7), and Household final consumption expenditure (up $91 million or 0.7).

Perth's Consumer Price Index (CPI) rose by 4.2 through the year the March quarter 2006, much higher than the national increase of 3.0. Despite national CPI growth remaining well below the rise in Perth, it has now reached the top of the Reserve Bank of Australia's (RBA) target range for inflation of 3.0, which influenced a decision by the RBA to increase official interest rates by 25 basis points to 5.75 in May 2006.

The value of Western Australia's imports grew strongly through the year, rising by 39.9 ($1,379 million), mainly for gold and petroleum. The outlook for Western Australian exports remains positive for the remainder of 2006 and 2007, with economic activity forecast to grow favourably in the state's major export markets.

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