Gross state product (GSP)
Western Australia’s real GSP (adjusted for price changes) grew 3.5 per cent in 2022-23, continuing the solid growth of recent years. Over the past four financial years, Western Australia’s economy grew at an average annual rate of 2.7 per cent, higher than the national average of 2.3 per cent and higher than the rate of the three largest Australian states (New South Wales, Victoria and Queensland).
The mining industry made the largest contribution to Western Australia’s real GSP growth in 2022-23, after it detracted from growth in 2021-22. An increase in capacity in iron ore and other minerals (including lithium) allowed for higher production in Western Australia to meet demand from overseas markets. The next largest contributor to GSP growth was the transport, postal and warehousing industry as air passenger transport, particularly international travel, continued to recover. Other industries making significant contributions to growth in 2022‑23 were wholesale trade, construction, and professional, scientific and technical services. The only industry that detracted from GSP growth in 2022-23 was retail trade, with household spending on discretionary goods falling from elevated levels.
From an expenditure basis, goods exports made the largest contribution to Western Australia’s real GSP growth in 2022‑23 due to strong overseas demand for the State’s resources commodities. The next largest contributor to GSP growth in 2022-23 was household consumption, which was supported by strong employment growth.
The nominal value of Western Australia’s GSP increased by 10.0 per cent in 2022‑23. This pushed the State’s GSP per capita to $157,390, 62 per cent higher than the national average. However, gross household disposable income per capita – which provides a better indicator of how income from economic activity flows through to households – grew at a much lower rate of 2.3 per cent (and in real terms went down by around 4 per cent). Western Australia’s gross household disposable income per capita was $62,539 in 2022‑23, which was just over 10 per cent higher than the Australian average of $56,824.
Employment in Western Australia grew by around 9,400 in October 2023, however with a higher participation rate and an increase in the number of unemployed people, the unemployment rate went up by 0.5 percentage points to 3.8 per cent. This was the twentieth consecutive month that Western Australia’s unemployment was below 4 per cent. The underemployment rate has also remained at either just above or just below 6 per cent over this period.
The limited spare capacity in the labour force has contributed to higher growth in nominal wages. Year‑on‑year growth in Western Australia’s wage price index was 4.6 per cent in the September quarter 2023, up from 4.2 per cent the previous quarter and the highest rate of growth since the June quarter 2012. Wages growth in Western Australia in the September quarter 2023 was also higher than the national average (4.1 per cent) and the second highest of all States and Territories (behind Queensland’s 4.7 per cent). However, Western Australia’s wages growth in the September quarter 2023 remained lower than the increase in Perth’s consumer price index for that quarter (5.4 per cent), indicating real wages are still falling.