Average WA wages tipped to skyrocket

Wages in WA are set to soar, a report out today predicts, partly driven by the Federal Government's decision to slash the number of migrant workers.

The Deloitte Access Economics report warns, however, that West Australians could miss out on some of the benefits of the resources boom.

Key inflation figures today are also expected to show high prices for fruit, vegetables and petrol.

The analysts believe prices for key commodities including iron ore will remain high for at least the next two years, underpinning a surge in mining and construction.

While other parts of the economy will struggle under the weight of the strong dollar and cautious consumer sentiment, the WA economy will be one of the nation's strongest.

That is predicted to translate into an average weekly wage of almost $1200 by 2012-13, well up on the current $1078.

"WA already has too little spare capacity, so it will soon see a swag of wage and price increases as skill shortages and delivery delays proliferate," Access Economics director Chris Richardson said. But he said the skills shortage was in part due to Federal Government policy.

Mr Richardson said the decision to cut migrant numbers was adding to the demographic problems confronting the country, with many Australians expected to retire rather than keep working.

Unemployment could quickly fall back to the lows it hit through the pre-global financial crises resources boom.

That lack of workers, combined with the attraction of the mining boom to many tradespeople, could cost many West Australians hoping to build their dream homes.

"WA will need to balance growth in both housing and resource project work if it wants to be able to benefit fully from all that mineral wealth," Mr Richardson said.

Buying or building a new house would not get any easier, with Access expecting the Reserve Bank to push up interest rates.

The March quarter inflation result is expected to show prices up by more than a full percentage point, driven by floods in the east.