WA fortunes rest on shoppers
WA's economy will have to rely on shoppers opening their wallets as the housing sector comes off the boil.
Housing Industry Association and Commonwealth Bank reports show how important everyday shoppers will be to the State economy over coming months.
The HIA, in updated annual forecasts, believed last financial year was the peak for home construction, with new starts across the State hitting a record 29,853.
But construction is predicted to fall more than 14 per cent to about 25,500 through 2014-15.
Though still high by historical standards, the drop would be a big hit to a sector that had played a major role in offsetting the slowdown in the mining construction sector.
The story gets tougher, with the HIA tipping another fall in activity next financial year.
Though West Australians have been busy building homes, they have not been nearly as interested in renovations.
Renovation activity in 2013-14 fell 7.9 per cent and this year it is forecast to fall another 4.7 per cent. It should lift next financial year but overall, WA renovations would be worth shy of $3.9 billion.
HIA chief economist Harley Dale said that housing construction nationally would lift through this year to hit a record 196,000 new housing starts before easing next financial year. "Imagine how weak the Australian economy would be without new housing and its economic multiplier benefits," he said.
The slowdown in WA housing would have wider economic ramifications if the State's shoppers failed to spend.
Figures to be released today by the Commonwealth Bank show spending through CBA point-of-sale terminals indicate a further step down in money through the nation's retail outlets last month.
On a trend basis, sales were up 0.2 per cent nationally and 0.3 per cent in WA. It was the lowest monthly growth since mid-2012.
CommSec chief equities economist Craig James said the recent fall in official interest rates and lower petrol prices should give shoppers the kick-along needed to boost the overall economy.
However, figures out today are expected to confirm a further rise in petrol prices on the back of slightly stronger global oil prices and the softer Australian dollar.
