Mining boom drives Perth's economy to record output as iron ore prices hold

Western Australia's economy grew 6.1 per cent in real terms in the past financial year, its strongest performance since the last resources boom peak, with Perth as the primary beneficiary of the professional services, engineering, and technology employment generated by sustained high iron ore and lithium prices in global commodities markets.

WA Treasury's half-yearly economic review published this week confirmed the resources sector had contributed $4.2 billion in royalties to the state government — the second-highest annual figure on record — and generated approximately 28,000 direct jobs in Perth in the same period across mining companies, engineering contractors, technology providers, and specialist services firms.

The flow-on effects for Perth's CBD and inner-ring economy have been pronounced, with the office vacancy rate in the Perth CBD falling to 5.8 per cent — the tightest in any Australian capital — and prime office rents increasing 15 per cent over 12 months. Several major mining companies have expanded their Perth headquarters in response to portfolio growth and the need to accommodate expanded technology and sustainability teams.

Commercial property developer Dexus reported the strongest leasing conditions it had seen in Perth in 20 years, with a forward pipeline of new premium buildings fully committed before commencement of construction. The scarcity of available quality space has encouraged several companies to commit to major office refurbishments rather than risk their tenancy position by waiting for new supply.

The retail sector has similarly benefited, with Hay Street Mall recording its highest foot traffic since 2014 and several high-profile international retailers opening their Perth flagship stores in the past 12 months.

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