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Call it what it is: Western Australia is heading for a recession

It is bloody hard to be a West Australian at the moment.

Every couple of weeks we hear about another slate of job losses, more economic pain and no idea of when it will all end. Below all of this too many are scared to say the obvious.

"The insane rise at the start of the week was irrational and is unlikely to continue," said Huang Huiwen, an analyst at ...
"The insane rise at the start of the week was irrational and is unlikely to continue," said Huang Huiwen, an analyst at Shanghai Cifco Futures Co. Photo: Michele Mossop

WA is heading for a recession and we should treat it as such.

We keep calling this part of the cycle an 'economic downturn'. That's cute, but it is severely underplaying the situation.

This pain is real. Last Thursday, Western Australia broke a record with 22 straight months of full-time job losses.

Longer than at any point in our history, even the early 1990s recession, which WA felt hardest. 

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We are edging 30,000 people losing full-time jobs this year alone. We all know someone who has fallen victim to this trend.

I've been following this situation in depth for about a year now and in speaking to business and the outlook they have for WA, I can only conclude that there are a few more months of this. We could even pass 30 consecutive months.

Conrad Liveris believes we are heading for a recession in WA.
Conrad Liveris believes we are heading for a recession in WA. 

Alongside this is minimal, if at all, wage growth. In the most recent Australian Bureau of Statistics report, women had wage growth of a mere $6.90 compared to six months earlier, while men saw their average weekly wage actually went backwards $13.10.

That doesn't sound like much, but with the cost of living continuing rising it all adds up.

It is unsurprising that we are seeing people leave the workforce overall. Tired of looking for work and getting constant rejection they are tapping out entirely. They will probably never return and end up on welfare.

Combine all of this with a recent report from the Chamber of Commerce and Industry that WA businesses have a pretty bleak outlook until the new financial year. 

I could go on for days about the nature of the economic situation we have, but I think you get the point.

Western Australia is in recession, with little outlook of change. We have found ourselves in one of the most pitiful situations in our history. Pitiful because we shouldn't be here.

In the early stages of the boom we were told to expand our economy, to build our capacity in other industries.

Instead of heeding this advice, we became content. Even today we keep clinging to the hope that the mining industry will be our saviour. That the iron ore price will shoot back above $100 a tonne and we will all be saved.

For a few months now the price has been stable around $70 a tonne, well above what companies need it to be profitable. Major miners are pretty happy with where they are sitting. They are making changes to their businesses so they don't need to be so reliant on their workforces.

So when Rio Tinto announced job cuts of 500 people on Monday we shouldn't have been surprised. Actually, we should get used to hearing about more job losses next year.

Welcome back to recession, WA.

Conrad Liveris is a workforce diversity specialist.
 

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