Economist shares market insights
Members of the local business community and industry representatives welcomed National Australia Bank’s senior economist at an economic update information session at the Karratha Leisureplex last week.
Melbourne-based market economist David de Garis has extensive experience in economic forecasting and analysis for the private, government and financial sectors.
His session in Karratha focused on the Australian economy, as well as the outlook for commodity markets, interest rates, exports and the Australian dollar.
Mr de Garis said despite demand for steel from within China decreasing and iron ore prices dropping, domestic iron ore production was still strong in WA.
“We’re very fortunate we’ve got some of the most globally competitive and world-class facilities for iron ore right here in the Pilbara — those projects will be here for a long time,” he said.
“It’s more a question of price and the rate of return on those projects as opposed to the survival of the industry.
“The benefits for the local community have been that the cost of housing is coming back down to an affordable level, rents are decreasing, and businesses can get employees at reasonable wage rates and afford to house them.”
Mr de Garis said liquefied natural gas production would significantly add to the Australian economy’s growth over the next decade.
“Not unlike iron ore, global energy prices are quite soft or not as high as they once were, so companies and contractors will be focusing on being competitive and taking costs out of their business,” he said.
“Australia will be a major player in the LNG market, export volumes are going to triple or quadruple over the next five years, which will add something like 4 per cent to Australian GDP growth over that period of time.
“We have world-class facilities here — Pluto is up and running, Wheatstone is under construction and Gorgon isn’t too far away ... those projects will stay there and produce well into the future.”
Karratha and Districts Chamber of Commerce and Industry chief executive John Lally said it was important to keep the bigger picture in mind when looking at the local economy.
“We know what’s going on with the local economy, we just need to see things affecting us down the pipeline and where we fit as an LNG and iron ore producing area,” he said.
“The price of iron ore isn’t affecting businesses, what’s affecting them is that construction has stopped and operations started, so businesses are going to have to adapt and diversify to this slowdown phase.
“The chamber is working really hard to work out ways we can help smaller players.”
Senior economist David de Garis, local NAB representative Trudy Gadaleta, KDCCI chief executive John Lally and NAB’s Scott Gladman at the Karratha Leisureplex.