Leslie Massey
Western Australia is a state with a large economy driven by its resources and services sector. It accounts for almost one-third of the continent and is Australia's fourth most populous state, with 2.6 million inhabitants. In 2018-19, Western Australia's gross state product was A$260.6 billion, contributing 17.1% to Australia's GDP. The state's economy is largely driven by the extraction and processing of minerals and petroleum commodities, as well as agricultural production, contributing to its position as one of the wealthiest places globally.
| Characteristics | Values |
|---|---|
| GDP in 2024 | AUD 455,707 million |
| GDP in 2023 | AUD 446,066 million |
| Gross State Product in 2018-19 | AUD 260.6 billion |
| GDP per capita in 2018-19 | AUD 135,479 |
| Average full-time adult weekly income in 2012 | AUD 1,617.90 |
| Gross State Product per person | AUD 82,653 |
| Population | 2.6 million |
| Area | 2.5 million km^2 |
| State Final Demand Growth in Q4 2023 | 0.8% |
| State Final Demand Growth in Q1 2025 | 0.2% |
| Annual Growth Rate in Q4 2024 | 1.3% |
| Growth in the 2023-24 financial year | 0.5% |
| Major export commodities | Iron-ore, alumina, crude oil, liquefied natural gas (LNG), nickel, gold, ammonia, wheat, wool, live sheep, and cattle |
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What You'll Learn
Western Australia's economy is driven by exports
Western Australia's economy is largely driven by its resources and services sector, particularly the export of minerals, petroleum, agricultural commodities, and specialised manufactured goods. Covering an area of 2.5 million square kilometres, the state is the largest in Australia, accounting for almost one-third of the continent. With a population of 2.6 million people (11% of the national population), Western Australia is the nation's fourth most populous state.
The state's major export commodities include iron ore, alumina, crude oil, liquefied natural gas (LNG), nickel, gold, ammonia, wheat, wool, and live sheep and cattle. In 2011, Western Australia provided 46% of Australia's merchandising exports, and in 2018-19, the state exported A$147.1 billion worth of goods, contributing significantly to the nation's economy. Western Australia is also a significant producer of bauxite, with half of the national production originating from the state.
The Western Australian economy is more capital-intensive than that of other states, with a higher gross state product per person. Diversification of commodities over the past 15 years has resulted in a more balanced production base and less reliance on a few major export markets. This diversification has insulated the economy from fluctuations in world prices. For example, high oil and gas prices can sustain export income when the prices of other commodities, such as alumina and nickel, fall.
Agricultural production in Western Australia is a significant contributor to the state and national economy, despite the challenges posed by limited water resources and infertile soils. Wheat production, for instance, accounted for nearly half of the nation's total in 2006-07, generating $1.7 billion in export income. Other notable agricultural exports include barley, peas, wool, lamb, and beef. Western Australia also meets the high global demand for live animal exports, particularly in Southeast Asian feedlots and the Middle East.
The state's economy has historically been centred around mining and pastoral industries, and it continues to be a major player in the mining sector. Iron ore, primarily mined in the Pilbara region, is the state's most significant mineral export commodity. Coal mined near Collie is used for baseload electricity generation in the state's southwest. Western Australia is also a significant producer of petroleum and natural gas, with major reserves extracted offshore from the continental shelf and the Timor Sea.
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WA's gross state product
Western Australia's gross state product (GSP) in 2018-19 was A$260.6 billion, which accounted for 17.1% of Australia's GDP and made it the nation's most productive state. Western Australia's GSP per person was $82,653, the highest of any Australian state and well above the national average of $57,925. The state's economy is largely driven by the extraction and processing of natural resources, including iron ore, gold, liquefied natural gas, and agricultural commodities such as wheat. Western Australia is the world's third-largest iron-ore producer and extracts 75% of Australia's gold. The state's agricultural production is also a significant contributor to the economy, with wheat production in 2006-07 reaching nearly 10 million tonnes, accounting for almost half of the nation's total.
Western Australia's economy is export-oriented, with around half of Australia's exports of goods originating from the state each year. In 2018-19, the state exported A$147.1 billion worth of goods and imported A$34.1 billion, resulting in a trade surplus of A$112.95 billion. Western Australia's overseas merchandising exports accounted for 46% of the nation's total, with iron ore, alumina, crude oil, liquefied natural gas, nickel, gold, ammonia, wheat, wool, and live sheep and cattle as the major export commodities. The state's resource sector growth has led to labour and skill shortages, prompting the state government to encourage interstate and overseas immigration.
The Western Australian economy is more capital-intensive than other states due to its natural resource abundance. Diversification over the past 15 years has provided a more balanced production base and reduced reliance on a few major export markets. The average full-time adult weekly income in Western Australia is higher than the Australian average, at A$1,617.90 compared to A$1,406.80. Perth, the capital city of Western Australia, has the second-highest property prices in the country, and high rental prices continue to be an issue.
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WA's natural resources
Western Australia's economy is largely driven by its natural resources, with around half of Australia's exports of goods originating from the state each year. WA's mineral and petroleum commodities are key to its economic output. It is the world's third-largest iron-ore producer, contributing 15% of the world's total production and 46% of Australia's exports. It also produces 75% of Australia's gold. Australia is the world's largest producer of bauxite and alumina, with half of the national production coming from Western Australia.
The state also has a significant agricultural sector, contributing to both the state and national economy. Wheat production in WA has accounted for almost half of the nation's total, providing $1.7 billion in export income. Other significant farm outputs include barley, peas, wool, lamb, and beef. There is also a high level of overseas demand for live animal imports from WA, with approximately 50% of Australia's live cattle exports coming from the state.
Western Australia is the nation's largest state, covering an area of 2.5 million km2, or almost one-third of the continent. Its natural resources provide a comparative advantage in resource extraction and processing, making the state's economy more capital-intensive than others. The state's gross product per person is higher than any other state and well above the national average.
In addition to its mineral, agricultural, and livestock exports, Western Australia also produces and exports crude oil and liquefied natural gas (LNG). Australia is the world's fifth-largest exporter of LNG, with most of it produced by the North West Shelf Venture near Karratha. Coal mined at Collie is the main fuel source for electricity generation in the state's southwest.
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WA's agricultural production
Western Australia's economy is largely driven by the export of natural resources, including minerals, petroleum, and agricultural commodities. WA's agricultural production is a significant contributor to the state and national economy. The state's diverse climates, rich soils, and large-scale irrigation networks provide optimal growing conditions for a wide range of crops and livestock.
In 2006-07, wheat production in WA was nearly 10 million tonnes, accounting for almost half of Australia's total wheat production and providing $1.7 billion in export income. Other significant farm outputs in WA include barley, peas, wool, lamb, and beef. The state also has a high demand for live animal exports, with approximately 50% of Australia's live cattle exports originating from WA.
WA's agricultural sector is highly seasonal, and the state is known for its large-scale irrigation practices. The state's agricultural production is closely linked to its natural resources, with a focus on export-oriented industries. WA's agricultural commodities, including wheat, wool, and live sheep and cattle, contribute significantly to the state's merchandising exports, which accounted for 46% of Australia's total in 2018-19.
The state's agricultural and food manufacturing industries are closely linked, with WA known for its diverse range of crops and livestock. The state's universities and private enterprises collaborate to research new products, growing techniques, and sustainability practices. WA's agricultural sector is also supported by its transport infrastructure, including 75 public ports, 139 airports, and 3,666 miles of railways, which facilitate the export of fresh produce to domestic and international markets.
Overall, WA's agricultural production is a vital component of the state's economy and contributes significantly to Australia's agricultural and merchandising exports. The state's diverse natural resources, favourable growing conditions, and innovative practices position WA as a key player in global agricultural markets.
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WA's economy vs other states
Western Australia's economy is largely driven by the extraction and processing of natural resources, including minerals and petroleum commodities. It is the nation's largest state by area, covering 2.5 million km2, or almost one-third of the continent. Western Australia's gross state product (GSP) was A$260.6 billion in 2018-19, contributing 17.5% to Australia's GDP and making it the country's most productive state. The state's per capita GDP of A$135,479 is significantly higher than the national average of A$74,605, and its GSP per person is also the highest in the country at $82,653.
Western Australia's economy is export-oriented, with around half of Australia's exports of goods originating from the state each year. The state's major export commodities include iron ore, alumina, crude oil, liquefied natural gas (LNG), nickel, gold, ammonia, wheat, wool, and live sheep and cattle. In 2018-19, Western Australia exported A$147.1 billion worth of goods, creating a trade surplus of A$112.95 billion. The state's merchandising exports accounted for 46% of the nation's total, and it is also a significant producer of a wide range of resource commodities. Australia is the world's largest producer of bauxite and alumina, with half of the national production coming from Western Australia. The state is also the world's third-largest producer of iron ore and extracts 75% of Australia's gold.
The Western Australian economy is more capital-intensive than other states due to its abundant natural resources, providing a comparative advantage in resource extraction and processing. The state has diversified its economy over the past 15 years, reducing its reliance on major export markets and insulating itself from fluctuations in world prices. There has also been strong growth in the services and construction sectors.
In comparison, New South Wales has the largest economy in Australia, contributing 30.7% to the country's GDP, followed by Victoria at 22.7% and Queensland at 19.1%. Western Australia's economy is larger than that of South Australia (5.6%) and Tasmania (1.6%). The state's economic growth has led to significant labour and skills shortages, with the government encouraging interstate and overseas immigration to meet demand. Western Australia's average full-time adult weekly income is higher than the national average, and its property values, particularly in Perth, are the second highest in the country.
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Frequently asked questions
In 2018-19, Western Australia's gross state product was A$260.6 billion (17.5% of Australia's GDP), making it the state with the highest contribution to the nation's GDP.
Western Australia's economy is largely driven by the export of natural resources, including iron ore, gold, liquefied natural gas, and agricultural commodities such as wheat. The state's mineral and petroleum commodities are also significant contributors.
Western Australia has the second-highest GDP contribution among Australian states, with New South Wales contributing the most at 30.7%. Queensland, Victoria, and South Australia follow Western Australia, contributing 19.1%, 22.7%, and 5.6% respectively.
