Kalgoorlie businesses face significantly higher cost pressures compared with WA counterparts, economist says

Kalgoorlie-Boulder businesses face greater cost pressures compared with those across the State, according to economist Aaron Morey. But Mr Morey said the record high gold price combined with a slowly improving labour market meant the Goldfields would continue to prosper. The Chamber of Commerce and Industry WA’s chief economist presented at this year’s What’s Down the Track Forum & Exhibition in Kalgoorlie-Boulder on Thursday, providing an overview of how the local economy compared with the wider WA economy. Mr Morey said based on CCIWA and Kalgoorlie-Boulder Chamber of Commerce and Industry data, local businesses faced significantly higher rent, transport, and insurance costs than other WA businesses. “The cost of insurance is higher here . . . the cost of transport is much higher (in) the regions, particularly in this region, and . . . the cost of rent (is) significantly higher in this part of our great State,” he said. Mr Morey said critical housing shortages in the city also hurt businesses’ ability to attract and retain staff. “There’s plenty of challenges in the economy,” he said. “We’ve been surveying businesses for 25 years at CCI and . . . we ask the question ‘what is the barrier to your business growing over the next 12 months?’ “A significant portion of businesses, and even higher in this region, have identified that (the housing crisis) is actually inhibiting their ability to attract and retain staff. “In addition, the supply challenges are still very much remaining — rising operating costs, and labour shortages.” The economist said despite these challenges, the record high gold price and a slowly improving labour market, meant the region would continue to thrive. “I think the Goldfields is beautifully placed in terms of the traditional industries and the scope of further diversification within mining,” he said. Mr Morey also touched on how the election of Donald Trump in the US might influence the global economy. He predicted the 47th US president’s term would lead to increased military spending and higher inflation. “Expect more global defence spending, and that positions WA really well. Europe is going to have to spend more,” Mr Morey said. “I don’t expect significant ramifications for Australia, but I could be proven wrong on the 20th of January.” The What’s Down the Track Forum & Exhibition was hosted by the KBCCI.