Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 22 May 2017

Swan dive over?

Respite for WA?

Western Australia, which basically comprises the western third of the country, has been through a rough trot since the peak of the resources construction boom. 

And then in April the seasonally adjusted unemployment rate suddenly fell from 6.5 per cent to 5.9 per cent. 

Does this signal that the tentative beginning of a recovery? Well, perhaps. 

Certainly the decline in engineering construction is now considerably closer to the end than the beginning, while the recent bounce in commodity prices might help to spur along some new drilling as iron ore reserve are depleted.

The trend unemployment rate has recovered more gradually from 6.5 per cent in October 2016 to 6.1 per cent in April. 

This may in part have been helped along by net interstate migration to the eastern states. 

In fact, the labour force figures for WA have improved on a number of metrics since the third quarter of last year. 

For example, the employment to population ratio has tentatively begun to trend up again. 

Victoria has overwhelmingly created most of the new jobs over the past year on a net basis, but WA has moved back into positive territory having really plumbed the depths last year. 

Full-time employment had crashed as low as 890,800 in September 2016 - down from the record 2014 peak of 966,900 - but has since bounced back somewhat, up by 44,200 to 935,000. 

Monthly hours worked have also increased year-on-year, up by 1.7 per cent in trend terms.

The wrap

After such a punishing run, you wouldn't want to jinx it by calling the bottom, but there are at least a few signs of green shoots here for WA. 

On an obliquely related note, from March next year residents of Perth will be able to fly non-stop to London on the Qantas Dreamliner service.