However, the CCI maintains WA’s economy will continue to grow faster than other states, due mainly to population growth and the mining industry.The 2010 financial year growth forecast was revised down from 6.25% to 3.25%.“It’s become increasingly clear from the chamber’s view that the tentacles of the global financial crisis are now having a more widespread impact and reaching further than what we first thought,” CCI chief economist John Nicolaou told journalists yesterday.“We are suffering – a three per cent downward revision in forecast is a significant revision and will have implications around the state, and we’ve certainly seen that with mine closures, the delay of key projects in the mining sector and certainly some job losses in the worst case scenario.”Nicolaou said the mining sector is being hit in terms of expansion plans being delayed.“They are being delayed – they are not being stopped,” he noted.“There may be more delays, but in the end, we have an incredibly healthy mining sector in this state which will have healthy returns and drive our economy for many years to come.”Nicolaou admitted the chamber had not expected China to feel the effects of the crisis to the extent that it had.“We don’t forecast commodity prices, but we have factored in large falls in some of our key commodities that we produce, and what that has meant [is] that our exports for this financial year and next financial year are significantly less than what we had first thought,” he said.However, he said WA’s close relationship with China and developing Asia would insulate the state to some extent from the effects of the crisis.The CCI is expecting unemployment in Western Australia to remain low.“Unemployment is expected to remain at around 3.5 per cent for this financial year and next, and that is a very strong labour market,” Nicolaou said.He said that after years of shortages of skilled workers, miners would be doing everything possible to keep jobs.“Miners in this state will be reluctant to release their most valuable resource amidst this current uncertainty,” he said.“Otherwise when the next upswing comes, we’ll be caught short.”Nicolaou said Australia’s mining states – Western Australia and Queensland – had been the backbone of the nation’s economy and that is expected to continue and stave off a recession.“By and large, we’ve been the growth driver of the nation now for a few years, and to the extent that we’ll see such growth emerge out of this state for the next two years when conditions are at their worst, then we will ensure that Australia is safeguarded against any concerns per a recession.”
