UWA study emphasises critical role of resources in State's economy

14/11/97

Research by the University of Western Australia has emphasised the critical role played by the minerals sector in the State's economy.

The study, conducted by the Economic Research Centre at UWA and launched today by Resources Development Minister Colin Barnett, found that in a typical year, the minerals sector accounted for close to half of all growth in the State's economy and 9000 jobs in the minerals sector and other industries.

Releasing the study at Westralian Sands' newly-commissioned $134million synthetic rutile plant expansion in Capel, Mr Barnett said the study showed that without past and continuing minerals industry growth, other industries in WA would be significantly disadvantaged.

"The study shows that virtually every other sector of the economy except agriculture, forestry and fishing would be adversely affected by a lack of growth in the minerals sector," the Minister said.

"In particular, the study shows economic activity in the transport sector would be 2.6 per cent less, education, health and welfare 2.3 per cent less and wholesale and retail trade and entertainment 1.8 per cent less.

"Clearly, if the minerals industry was in poor health, then many non-mineral sectors would also suffer. This demonstrates the strong linkages between minerals and the rest of the economy. The challenge for WA is to maximise the value of our resources sector for the long-term benefit of the whole community."

What Does Mineral Growth Mean to Western Australia? is the third study of a three-year research program - Minerals, East Asia and the WA Economy - carried out for the WA Chamber of Minerals and Energy, by a team led by Professor Ken Clements, Dean of the Faculty of Economics and Commerce at UWA.

The study also estimates the effect on the State's employment levels of not having minerals sector growth. The effect would have been to lower employment growth by 1.4 per cent in a typical year. This represents about 9,000 jobs annually and includes all employment created in other industries as a result of minerals activity.

Between 1992 and 1996, the State's employment grew by an average 18,000 jobs per annum indicating that the minerals sector contributed directly and indirectly about one in every two jobs created in WA in the last several years.

"If there had been no growth at all in the minerals industry in the 1990s, the cumulative effect would have been around 60,000 fewer jobs today and a significantly higher State unemployment rate," Mr Barnett said.

Rather than an average growth in Gross State Product (GSP) of five per cent per annum recorded for the first half of the 1990s, the study shows GSP would have grown by only 2.6 per cent per annum if there had been no minerals growth.

The Research Centre has previously released the Economic Benefits from an Expanding Minerals and Energy Industry in November 1996, and Multiplier Effects of the Western Mining and Mineral Processing Industries in August 1995. The three studies have each been summarised into two page results statements available from the Chamber of Minerals and Energy.

Media contact: Justine Whittome (08) 9222 9699