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New car sales roaring
Kate Crompton with her new Mazda CX-5. Picture: Ben Crabtree/The West Australian

West Australians are snapping up new cars at near-record levels as prices in real terms for a fresh set of wheels fall to the lowest levels in 35 years.

Figures from the Australian Bureau of Statistics show a small drop nationally in car sales through July, though sports utility vehicle sales have soared to a record high.

Through July, almost 10,500 new cars were sold across WA - nearly 340 a day.

In the past year, more than 118,600 vehicles were sold in WA. Total sales in July were 16.5 per cent higher than a year ago.

An increasing number of the new vehicles were small SUVs such as the Mazda CX-5, with sales up more than 60 per cent in the past year.

Four-wheel-drives including the Toyota Prado and Nissan X-Trail also proved popular, with sales up more than 22 per cent.

One of those buying a new, small SUV yesterday was community manager Kate Crompton, who picked up a Mazda CX-5.

She has given up her 10-year-old Hyundai Accent in favour of something she can drive around town and down to her brother's place, which means traversing some gravel roads.

"I liked the position where you sit so you've got a good view of the road," she said.

The CommSec measure of car affordability showed it takes 27.5 weeks of average wages to buy a Ford Falcon, the shortest period since 1977. But there are mixed signals about the economy. NAB's monthly measure of business sentiment showed trading conditions fell to their lowest level in three years through July, largely because of a big drop in profitability.

However, the same survey also showed a sharp pick-up in business confidence, which moved from negative territory to positive.

The Roy Morgan measure of consumer confidence rose 2.1 points last week to stand at a 13-week high.

Federal Treasurer Wayne Swan will use a speech today to highlight that despite the headwinds overseas, the Australian economy continues to grow strongly.

He will also touch on the debate over productivity, arguing that claims of a fall in productivity do not stand up to scrutiny.

"We have seen a lift in productivity over the past year, with labour productivity in the market sector growing 5.3 per cent," he will say.

"This is not only the largest annual increase in a decade but it is well above the 10-year annual average growth in labour productivity in the market sector of 1.5 per cent."