- The first trip to Perth in three years was a great opportunity to meet with clients right across the CommBank network.
- Consistent feedback was that labour shortages and supply chain constraints are the major challenges for industries across a wide range of sectors, especially in construction and aged care. This is reflected in the relatively high rate of inflation in Perth (although the end of electricity credits also impacted) and financial difficulties for the residential building sector.
- WA is also enjoying a number of positive opportunities, including the traditional resource export sectors, a strong increase in key agricultural prices, a resurgence in foreign student applications in the higher education sector and the ability to provide specialised manufacturing capability that meets global climate change policy standards.
Welcome to the first edition of the Travelling Economist series for 2022. One of the best parts of my job is talking to clients of CommBank across Australia and internationally. For all the obvious reasons, physical travel has not been possible for the past couple of years, but I was recently fortunate to travel to Perth, Western Australia (WA). On this trip I met with and presented to clients right across the CommBank and BankWest network – institutional, global markets, commodity, corporate, business bank, property and private banking.
WA had its state border closed for a substantial part of the Covid 19 pandemic and this has clearly placed the WA economy in a different position to the major state economies on the east coast.
With the borders now open again, WA is facing a rise in Covid 19 cases, with the daily numbers now exceeding the daily numbers in NSW, for example. Feedback from the many clients I spoke with highlighted a number of key themes, many of which were consistent across multiple businesses.
The number one issue in WA, and consistently across many clients, was labour shortages. This was especially acute in a number of key industries – including Aged care, Construction, Mining and the Film industry. In the Aged care sector I was told that staff numbers are 30% lower than required. This can clearly be seen in the labour force data. For April the unemployment rate in WA dropped to just 2.9% well below the national rate of 3.9%.
In the construction sector the shortage of labour was also a major issue, with talk of the need for the reinstatement of 457 visa’s (the ‘temporary work skilled’ visa) to bring in the required labour. But for the construction sector, the shortage of labour was combining with a significant shortage of material inputs and materials as the biggest challenge for the industry.
CBA’s Global Economic and Markets Research team publishes a wide range of economic and financial research each week covering the latest data, trends, policy developments and topical issues in Australia and other major economies. To access these publications please visit the GEMR website.
Our Economic Expert
Stephen Halmarick is Chief Economist and Head of Global Economic & Markets Research at Commonwealth Bank of Australia. He was appointed to the Chief Economist role in April 2020 – having been the Head of the Global Economic & Markets Research team since January 2018. Stephen is responsible for the team of economists and strategists that cover Australian Economics, International Economics, Rates, Fixed Income, Foreign Exchange, Credit and Commodities research. Stephen is also a key spokesperson to clients and media on macroeconomic themes and a broad range of financial market issues.