WA's status as the engine room of the national economy has been underlined by figures showing that the State created more than 50,000 jobs in the past year as others struggled with rising unemployment queues.

The gap between the mining States and the rest is becoming so great that the former head of Federal Treasury, Ken Henry, said yesterday that businesses outside the mining boom would have to send work overseas if they were to survive.

As Australian Bureau of Statistics figures showed the nation shed more than 33,000 full-time jobs last month, Dr Henry used an address to the Australian Conference of Economists to warn that the mining and associated construction boom concentrated in WA was so big that firms not enjoying it had to take drastic action to keep going.

Financial markets were quick to price in a greater chance of another cut in interest rates, with June inflation figures also expected to be flat.

While the unemployment rate nationally rose to 5.2 per cent, it fell from 3.8 per cent to 3.5 per cent in WA and now stands at its lowest level since the early stages of the global financial crisis.

Since June last year, WA has added almost 51,000 full-time jobs, with more than 47,000 of those coming in the past six months. It is a different story in States dependent on their manufacturing sectors.

Victoria has lost 28,100 full-time jobs in the past 12 months, while in South Australia 26,200 full-time jobs have vanished.

Major retailer Myer added to the jobs gloom yesterday, announcing plans to shed another 100 staff.

Dr Henry said the sheer scale of the mining boom was hurting sectors outside it and tough decisions would have to be made.

"Structural adjustment in Australia could be assisted by implementation of some of the productivity and participation-enhancing initiatives being proposed in present debate," he said.

"I would endorse, especially, those initiatives that target a more efficient usage of intermediate goods and services, including exploring opportunities for what, these days, is usually referred to as 'offshoring'."

The West Australian

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