Economist shares mar­ket in­sights

Pilbara News - - News - ■ Court­ney Fowler

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.”

Pic­ture: Court­ney Fowler

Se­nior economist David de Garis, lo­cal NAB rep­re­sen­ta­tive Trudy Gadaleta, KDCCI chief ex­ec­u­tive John Lally and NAB’s Scott Glad­man at the Kar­ratha Leisure­plex.

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