Ruqayyah Snyder
Western Australia's economy is largely driven by the extraction and processing of natural resources, including minerals and petroleum commodities. The state's major exports include iron ore, alumina, crude oil, liquefied natural gas (LNG), gold, wheat, wool, and live sheep and cattle. In addition to its resource-based industries, Western Australia also has a significant agricultural sector, with wheat production accounting for almost half of the nation's total. The state's economy is further bolstered by a thriving tourism industry, attracting international visitors and students. Overall, Western Australia's gross state product was A$260.6 billion in 2018-19, contributing 17.5% to Australia's GDP and making it one of the wealthiest places on earth in terms of GDP per capita.
| Characteristics | Values |
|---|---|
| Western Australia's gross state product | A$260.6 billion (2018-19) |
| Western Australia's gross state product as a percentage of Australia's GDP | 17.5% (2018-19) |
| Western Australia's GDP per capita | A$135,479 (2018-19) |
| Western Australia's exports in goods | A$147.1 billion (2018-19) |
| Western Australia's imports in goods | A$34.1 billion (2018-19) |
| Western Australia's trade surplus | A$112.95 billion (2018-19) |
| Western Australia's merchandising exports as a percentage of the nation's total | 46% (2011) |
| Gross state product per person | $82,653 |
| Average full-time adult weekly income in Western Australia | A$1,617.90 (Feb 2012) |
| Western Australia's revenue from the mining sector as a percentage | 31% |
| Western Australia's revenue from the tourism industry | $9.3 billion |
| Western Australia's population as a percentage of the national total | 10.9% (June 2024) |
| Western Australia's contribution to Australia's exports of goods | 50% |
| Western Australia's contribution to Australia's exports of minerals | Significant |
| Western Australia's contribution to Australia's exports of petroleum | Significant |
| Western Australia's contribution to Australia's exports of agri-food | Significant |
| Western Australia's contribution to Australia's exports of specialised manufactured goods | Significant |
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What You'll Learn
Mining and mineral exports
Western Australia's economy is largely driven by the extraction and processing of a diverse range of mineral and petroleum commodities. The state's major mineral export commodities include iron ore, alumina, crude oil, liquefied natural gas (LNG), nickel, gold, ammonia, and diamonds. Western Australia is a significant producer of a wide range of resource commodities and is known as the engine room of the Australian economy.
Iron ore, mainly mined in the Pilbara region, is the state's most significant mineral export commodity. Western Australia is the world's third-largest producer of iron ore, contributing 15% of the world's total production. The state is also a major producer of gold, extracting 75% of Australia's total gold production.
Western Australia is the world's largest producer of bauxite and alumina, with half of the national production coming from the state. Alumina is produced at refineries fed by the Alcoa Huntly mine and the Worsley Alumina mine. The state is also a significant producer of LNG, with most of its production coming from the North West Shelf Venture near Karratha. Australia is the world's fifth-largest exporter of LNG.
In addition to minerals and petroleum, Western Australia also exports agricultural commodities such as wheat, barley, wool, and live sheep and cattle. The state's agricultural production is highly seasonal, with wheat production accounting for nearly half of the nation's total in 2006-07.
The Western Australian economy is highly dependent on its resource sector, with the mining sector being the state's largest revenue source, contributing 31% of the state's economy. The state's economy is more capital-intensive than other Australian states, with a higher gross state product per person.
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Agriculture and food exports
Western Australia's economy is largely driven by its resources and services sector, with exports of iron ore, gold, liquefied natural gas, and agricultural commodities such as wheat. The state's agricultural and food sector is a significant contributor to the economy, both locally and nationally. Western Australia is the nation's largest grain-producing region, and a major exporter of wheat, accounting for nearly half of the nation's wheat exports in some years. In 2022, wheat exports from Western Australia were valued at $5.5 billion. The state also produces other grains such as barley and canola, as well as meat, livestock, dairy, wool, horticulture, and honey products.
The agrifood sector in Western Australia is known for its high-quality, sustainably and ethically produced goods. It has a strong reputation in overseas markets, particularly in Asia, where about 70% of its agrifood exports are destined. China, Indonesia, and Vietnam are some of the largest markets for Western Australian agrifood products. The state's agricultural production is highly seasonal, but it has relatively lower variability in wheat exports compared to other states due to its focus on exporting wheat rather than using it for domestic feed. The El Niño and La Niña weather patterns also tend to have a lesser impact on Western Australia, reducing the variability of grain production.
Western Australia's agrifood sector is a significant source of employment, providing jobs for 188,400 people in 2016-17. The state exports up to 80% of its agricultural production, including grains, meat, fruit and vegetables, dairy products, processed foods, and live animals. There is a high demand for live animal exports from Western Australia, particularly in South East Asia and the Middle East, due to cultural and religious traditions and a lack of storage and refrigeration infrastructure. Western Australia is also a significant producer of wool, with a steady rise in exports since 2017.
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Petroleum and natural gas
Western Australia's economy is largely driven by the extraction and processing of a diverse range of mineral and petroleum commodities. The state is the nation's premier petroleum producer, accounting for 50% of gas production (including natural gas, coal seam methane and LNG feedstock), 61% of crude oil production, and 76% of condensate production. In 2016-17, the value of petroleum products produced in Western Australia amounted to $19.1 billion, increasing to $26.6 billion in 2017-18.
The petroleum industry in Western Australia is the largest contributor to Australia's petroleum exports. The state's North West Shelf (NWS) is the primary location for production, with oil exports shipped from Port Hedland. The industry extracts crude oil, condensate, and natural gas from deep beneath the Earth's surface. A large plant located at Withnell Bay near Dampier produces liquefied natural gas (LNG) for export to Asian customers. Crude oil and most petroleum liquids are exported, while natural gas is processed at plants on islands off the WA coast and onshore, then transported by pipelines to gas users throughout the state.
Five of the seven major sedimentary basins in Western Australia have known hydrocarbon accumulations, with production coming from the Carnarvon, Perth, Bonaparte, and Canning basins. Petroleum in Western Australia is mostly sourced from the Carnarvon Basin, which stretches for 1,000 km along the west and northwest coast. The North West Shelf Venture's LNG project in the Carnarvon Basin has an export capacity of 16.3 million tonnes per year and produces gas for Western Australia's domestic market. The Gorgon and Wheatstone LNG projects are also located in the Carnarvon Basin, with Wheatstone producing 2.1 million tonnes since its first shipment.
Most of the state's petroleum production occurs at offshore production platforms, although many wells are situated on the mainland and on several islands off the coast. WA's largest production platforms are North Rankin A and Goodwyn A, both operated by Woodside Energy, located approximately 130 km west of Dampier. There are currently four major natural gas transmission pipelines supplying the Western Australian gas market: the Dampier to Bunbury Natural Gas Pipeline (DBNGP), the Goldfields Gas Pipeline (GGP), the Parmelia Pipeline, and the Pilbara Gas Pipeline.
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Tourism
Western Australia's economy is largely based on unprocessed primary products, mainly from mining, but also from agriculture and horticulture, and to a lesser extent, forestry and fishing. However, tourism is also a significant contributor to the state's economy.
The total international visitors to Western Australia have been increasing above the national average. For the year ending in June 2011, there were 735,900 international visitors, a growth of 5.3% compared to a national average of 3.4%. These visitors spent a total of A$1.94 billion, up 9.4% from the previous year, with a 22% increase in international business visitors. The largest spikes in international visitors came from Indonesia, the USA, New Zealand, and Malaysia.
Western Australia had an estimated 7,000,000 overnight visitors to the state for the year ending in December 2012, making the tourism industry worth approximately A$6 billion. The industry generates billions in visitor spending each year, and for every dollar spent in the tourism industry, an additional 81 cents is generated and spent elsewhere in the economy.
The WA Tourism Satellite Account measures the economic contribution of tourism to Western Australia, and WAVES 2033 outlines a new vision for Western Australia to be recognized as a world-class destination, with an ambitious goal to grow visitor spending to $25 billion per annum by 2033.
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Finance, insurance and property
Western Australia's economy is largely driven by the export of commodities such as iron ore, gold, liquefied natural gas, and agricultural products like wheat. The state's economy is also underpinned by its resources and services sector, which includes finance, insurance, and property.
The finance, insurance, and property sector in Western Australia has experienced strong growth and contributes significantly to the state's economic output. This sector encompasses a range of activities and services, including banking, investment, insurance, and real estate.
Western Australia's position as a significant exporter of commodities has led to the development of a robust financial services industry. Banks and financial institutions play a crucial role in facilitating trade and investment, providing financing options for businesses involved in the production and export of commodities. Additionally, the state's thriving natural resources sector has contributed to the growth of the insurance industry, with companies offering specialised insurance products to cover risks associated with mining, energy, and agricultural activities.
The property market in Western Australia, particularly in Perth, has also been a key driver of economic growth. Perth property prices are the second highest in Australia, behind Sydney, and the state's growing population has led to increased demand for housing and commercial spaces. This has resulted in a booming real estate market, with high rental prices and rising property values.
The Western Australian government's Department of Finance plays a vital role in sustaining and growing the state's economy. It provides leadership and strategic advice across the public sector, supporting the delivery of services throughout the state. The department works on various initiatives, including infrastructure development, economic reforms, and asset management, to promote economic growth and enhance the state's financial position.
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Frequently asked questions
Western Australia's economy is largely driven by the export of minerals and petroleum commodities, including iron ore, alumina, crude oil, liquefied natural gas (LNG), and nickel. The state is also a significant producer of agricultural commodities such as wheat, barley, wool, lamb, beef, and live sheep and cattle.
Western Australia's gross state product was A$260.6 billion in 2018-19, contributing 17.5% of Australia's GDP. The state's economy is highly export-oriented, with around half of Australia's exports of goods originating from Western Australia each year.
The mining sector is Western Australia's largest revenue source, contributing 31% of the state's economy. Other key industries include agriculture, fishing, and tourism.
Western Australia has a diverse range of natural resources that provide a comparative advantage in resource extraction and processing. The state has also diversified its range of commodities over the past 15 years, insulating the economy from fluctuations in world prices.
