No. 3 - Department of Treasury - The Western Australian Government

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Western Australian Economic Summary2006 No.3The CCI-BankWest Survey’s index of wage costs also reached a record high inthe September quarter 1 .Labour was expected to remain tight in the December quarter. The index oflabour availability, based on businesses’ expectations for theDecember quarter, was at 28, only marginally higher than the record low of27 reached in the June quarter 2006 (See the Labour Market chapter for moreinformation).Profitability and Business IndicatorsProfitabilityThere are no reliable and timely state-level data on profits, but national dataon gross profits by industry show that the mining industry 2 has experiencedrapid growth in profits in the past two years, while in other sectors profitgrowth have generally been weaker (Figure 24).The ABS’s recent release of annual Gross State Product (GSP) data containsestimates of Gross Operating Surplus 1 that provide a rough proxy of profits.Figure 24150TRADING CONDITIONS AND PROFITABILITYIndex Numbers, Quarterly DataIndex numbers(100 = 'neutral')1251007550250Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06Trading conditions this quarter Profits this quarterSource: CCI-BankWest Survey of Business Expectations.1 This was somewhat affected by a seasonal component, as many employers applyannual wage increases at the beginning of the financial year.2 National level data for mining can be a reasonable guide to conditions in the miningindustry in Western Australia, see footnote 6 above.38 Department of Treasury and Finance
2006 No.3 Western Australian Economic SummaryThe table below shows that three of the four largest industries 2 in the Staterecorded strong rates of growth in Gross Operating Surplus in 2005-06, withmining up 44.9%, construction up 40.9%, and property and business servicesup 16.9%. Growth in manufacturing Gross Operating Surplus wassomewhat lower, at 5.6%.Table 10GROSS OPERATING SURPLUS AND GROSS MIXED INCOMEWestern Australia, By Industry, Nominal Growth (%)Industry 2003-04 2004-05 2005-06%AnnualAverageChange(overpast 3years)% Shareof WAGOS*(averageover past3 year)Agriculture, forestry 66.2 -22.6 1.1 9.1 6.3and fishingMining -12.2 52.9 44.9 24.8 40.0Manufacturing 33.1 -4.5 5.6 10.3 8.3Electricity, gas and 5.7 4.0 7.7 5.8 4.5water supplyConstruction 12.6 6.4 40.9 19.1 7.7Wholesale trade 17.8 7.7 3.9 9.6 4.0Retail trade 13.9 -3.6 5.0 4.9 3.7Accommodation,cafes andrestaurants10.7 9.6 6.4 8.9 1.1Transport and11.1 12.6 0.9 8.1 4.3storageCommunication5.2 2.4 -4.5 0.9 4.0servicesFinance and12.7 -0.2 17.3 9.7 4.8insuranceProperty and4.2 15.8 16.9 12.1 8.7business servicesEducation 46.4 14.6 27.7 28.9 0.1Health and12.7 6.3 17.1 11.9 1.4community servicesCultural and34.8 -7.9 4.6 9.1 0.7recreational servicesPersonal and other 10.6 0.8 3.2 4.8 0.3servicesTOTAL 7.4 15.4 22.6 15.0 100*Excludes Ownership of Dwellings and General GovernmentSource: ABS Cat. 5220.01 Gross Operating Surplus is derived as the excess of gross output over the costsincurred in producing that output. operations in Australia. The ABS only producesGross Operating Surplus industry data at a state level on an annual basis.2 These account for around two thirds of all industry Gross Operating Surplus overthe past three years. Mining is by and far the largest at 40%, followed by Propertyand Business Services (8.7%), Manufacturing (8.3%) and Construction (7.7%)Department of Treasury and Finance 39
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No. 3 - Department of Treasury - The Western Australian Government

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