Another day, another report about how the rapid unwinding of the once-in-a-century mining boom is crueling the WA economy.
This time The AFR’s “Junket Queen”, Jennifer Hewett, has just returned from a field trip to Perth and even she is struggling to polish the turd that is the Perth economy:
House prices have fallen sharply and office vacancy rates in Perth CBD are now just under 20 per cent, the highest in the country and the highest in Perth since 1995. Predictions for next year have that vacancy stat reaching at least 24 per cent…
After years of Western Australia having an unemployment rate well below the national average, the state now faces the ignominy of a rate well above it at 6.4 per cent… previously surging migration into WA from other states and New Zealand has reversed direction…
Suddenly, online sites are selling second hand “big boys’ toys” – jet-skis and quad bikes and fast boats – very cheaply. Such bargains are likely to last indefinitely. Economic conditions are expected to get worse before they get better…
There are countless bargains for all the accommodation quarters and construction equipment used for a resources boom no longer requiring any more new iron ore mines…
Chevron’s massive construction workforce of well over 10,000 people to build its Gorgon and Wheatstone LNG projects in the north of the state is falling fast. Within a couple of years there will only be several hundred working on site… all companies, including contractors and sub contractors, have been battening down and cutting their costs as a matter of survival through this new era…
For Western Australians, the dream of a better future is a cultural constant. It is just today’s reality that is so jarring.
All very true, and a world of difference from Hewitt’s barrage of posts last year (for example here, here, here and here), where she was a “guest” of the mining industry and wrote pieces talking up the prospects for China and commodities.
Of course, as MB has warned repeatedly, the situation in Perth/WA will get much worse before it gets better.
WA mining capex still has miles to fall before it is back to pre-boom levels:
Dwelling construction will likely crash next year as the glut of unsold homes intensifies amid rapidly falling population growth:
Perth house prices and rents will keep falling. And the State’s Budget deficit will widen as mining royalties and stamp duty receipts collapse.
There is no contemporary Australian experience for that which is coming to WA.
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