WA well-placed to climate erratic Donald Trump | Australian Markets
WA is well-placed to climate international headwinds triggered by US President Donald Trump’s erratic insurance policies, however easing population and softer commodity costs will weigh on the State’s financial growth.
The Chamber of Commerce and Trade WA is forecasting growth within the WA financial system will sluggish to 0.25 per cent this yr — down from 0.5 per cent in 2023-24 — earlier than lifting to 2.75 per cent in 2025-26 and dipping to 2.25 per cent in 2026-27.
In its latest half-yearly outlook report launched on Monday, CCIWA discovered the affect of Mr Trump’s 25 per cent tariffs on Australian metal and aluminium would solely have a restricted direct affect on WA.
WA iron ore and alumina had been processed elsewhere, permitting each to side-step the tariffs, it stated.
CCIWA chief economist Aaron Morey stated any escalation of the tariff tit-for-tat between the US and China would have flow-on results for WA. Mr Trump not too long ago doubled levies in opposition to China to twenty per cent.
“Around half of WA’s exports are destined for China so any economic slowdown there will be felt by businesses here,” he stated.
“At the same time, a decline in demand for Chinese exports in the US could reduce demand for WA products used as inputs to production, potentially exposing our resources sector.”
Regardless of the impacts, the report stated WA’s financial system was well-placed to resist international headwinds in 2025.
“The fundamentals of the WA economy remain strong and the rise of other trading partners in South-East Asia will at least partially offset a downturn in demand from China, so we expect demand for iron ore in particular will remain steady over the longer term,” Mr Morey stated.
CCIWA predicts family spending growth to dip, down from 3 per cent growth in 2023-24 to 2.25 per cent this yr, earlier than climbing again to 2.75 per cent in 2025-26.
“The good news is that we expect household spending to gather momentum, with the recent interest rate cut and more on the horizon offering some breathing space for borrowers,” Mr Morey stated.
Enterprise investment is set to contract one per cent this yr as a consequence of persistent price pressures coupled with weak commodity costs. It comes after a 12.7 per cent growth recorded final yr.
CCIWA pointed to nickel and lithium costs which have been caught within the doldrums, forcing a number of mines to enter care and upkeep or scale back.
These included the Mineral Sources Bald Hill and Arcadium Lithium Mt Cattlin mines.
“We expect business investment to bounce back next financial year as existing activity ramps up and some new projects come online,” Mr Morey stated.
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