Page 5 - REIWA.com Market Update / June Quarter 2017

WA ECONOMIC OVERVIEWThe WA economy is strongly related to the commodities sector due to its plentiful reserves of natural resources. Since the peaks of the “mining boom” the local economy has struggled to diversify and has been at constant battle with rising levels of unemployment and subdued property market conditions.However, in recent times there has been a resurgence in commodity prices which has provided some short-term relief for our mining state. Recently, unemployment has begun to trend downwards, the rate of economic contraction has slowed (as measured by state nal demand), and the residential property market has seen higher levels of activity in both the established and rental fronts.As Western Australia moves away from its dependence on the resources sector, opportunities exist for growth in other industries to be unlocked. Recent economic indicators reveal that industries such as agriculture, healthcare and retail have strengthened of late. Employment levels are expected to remain steady in 2017 with current treasury estimates boasting an optimistic outlook for both employment and population trends going forward.Ultimately, any strength in the macroeconomic environment would have a positive impact on the local real estate market supported by con dence in the economy and any potential population growth will increase the demand for housing.STATE FINAL DEMANDWestern Australia’s State Final Demand totalled $48.6 billion during the March 2017 quarter which is 6.6 per cent lower than levels seen one year ago. The weaker gures imply so demand for goods and services for consumption or capital retention and re ect the local economic climate.$60,000 $58,000 $56,000 $54,000 $52,000 $50,000 $48,000 $46,000 $44,000 $42,000UNEMPLOYMENTsource: ABS 520620.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0%State Final Demand (LHS)Annual Growth (RHS)The unemployment rate has experienced improvements over the last quarter and now stands at 5.6 per cent (June 2017). Total employed persons in the state have grown to count 1.37 million workers. Approximately 69 per cent of these arein full-time employment whilst 31 per cent are in part-time employment. The rising popularity of part-time roles re ectthe changing needs of businesses and preferences of workers. The improvement in the forward looking unemployment forecasts set by the Treasury are largely driven by an optimistic outlook on future expected population growth together with better job growth opportunities, especially in industries such as Agribusiness, Tourism and Healthcare.7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0Source: ABS 6202 (unemployment as measured in trend terms)5.6%Unemployment RateREIWA.COMMARKETUPDATE | JuneQuarter2017 | 5Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017Mar 2012PER CENT (%)$ MILLIONSSep 2012Mar 2013Sep 2013Mar 2014Sep 2014Mar 2015Sep 2015Mar 2016Sep 2016Mar 2017PER CENT (%)