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FEATURE ARTICLE

The following feature article appears in detail in the printed version of the publication, and will be available on the ABS website on 6 October 2004.

HOUSEHOLD WATER CONSERVATION AND USE IN WESTERN AUSTRALIA

Water is a crucial resource for Western Australians in terms of maintaining public health, facilitating economic development and preserving the environment. Recent drought conditions in this state have brought into focus the need to ensure a sustainable water future for Western Australians. This article examines current and future trends in the supply of, and demand for, water in Western Australia and provides a snapshot of water conservation and use by Western Australian households.


SOCIAL TRENDS

The following article appears in detail in the printed and electronic versions of the publication:


POPULATION AND HEALTH

This article presents information on the topics of population and health, including recent and long term trends in Western Australia's population characteristics and growth, causes of death, life expectancy and use of health services.


OVERVIEW


ECONOMIC SUMMARY

The Western Australian economy continued to grow in the March quarter 2004, with State Final Demand (in trend chain volume terms) increasing by 1.0% - the fourteenth consecutive quarterly increase. However, this was the first time that growth in the state's economy had dropped below the national rate of growth (1.3%) in seven quarters.

The main contributor to growth in the March quarter 2004 was household consumption, which rose by 1.7%, driven by rising incomes, low unemployment and low interest rates (unchanged at 5.25%). There was also a rebound in the state's housing sector in the March quarter 2004, as dwelling investment increased by 14.5%. The rise in housing investment, during the period, reflects the realisation of delayed house construction caused by materials shortages in the preceding quarter, as well as sustained housing demand.

Business investment on Machinery and equipment and Intangible fixed assets detracted from growth in the March quarter 2004, down by 5.0% and 20.8% respectively. The decline in investment on Intangible fixed assets was mainly due to the completion of a major petroleum exploration project in the previous quarter.

The value of Western Australia's exports decreased by 3.5% in the March quarter 2004, compared to the March quarter 2003, corresponding with the higher $A against the Trade Weighted Index (up 23.4%) and $US (up 34.0%). Export volumes, however, were stable for a number of major commodities, including iron ore, gold and natural gas, due to an increase in $US commodity prices and strong international demand. Wheat exports rose considerably in the March quarter 2004, from the previous March quarter, as a result of the much improved harvest in 2003 following the drought in 2002.

Based on the continued recovery of the global economy, Western Australia's exports are expected to be a key driver of growth for the domestic economy over the next year. Conditions in the US and Japan have improved, with the US economy growing by over 3.0% in 2003 and forecast to grow by up to 5.0% in 2004, while the Japanese economy has grown by 2.3% in 2003 and is expected to grow at the same rate in 2004. China, and its rapidly rising demand for raw materials, continues to stimulate export growth in Western Australia. The Chinese economy grew by 9.1% in 2003 and is expected to grow by over 7.0% in 2004. With demand conditions improving in Western Australia's major export markets, the recovery in agricultural production in 2003 and the completion of new resource projects, the outlook remains positive for export growth in 2004.

Western Australia's labour market continues to benefit from a steadily growing domestic economy. Full-time and part-time employment increased in the three months to May 2004, up by 1.0% and 2.4% respectively. The unemployment rate declined to 5.1% in Western Australia, compared to 5.6% nationally.


STATE ACCOUNTS

State Final Demand

In the March quarter 2004, Western Australia recorded an increase of 1.0% ($192 million) in State Final Demand (trend chain volume terms), the fourteenth consecutive quarterly increase. The March quarter result, however, was below national growth (1.3%) for the first time since the June quarter 2002 (seven quarters). While growth in Western Australia's domestic economy has steadily slowed, since peaking at 2.7% in the June quarter 2003, the level of domestic activity remains at a relatively high level ($20,373 million).

• Household final consumption expenditure - up $163 million (1.5%), mainly on the Purchase of motor vehicles (driven by the higher $A reducing the price of imported vehicles), Food (due to more favourable weather conditions following the 2002 drought), Transport services (reflecting a rebound in international travel) and Rents and other dwelling services (coinciding with rising property prices);

• Dwelling investment - up $149 million (14.5%), due to the high level of investment activity in the property market and supply-side constraints that hampered construction in the December quarter 2003; and

• Non-dwelling construction - up $58 million (4.6%), reflecting an increase in engineering construction on a major port upgrade and mine expansions.

• House purchase - up 1.7%, driven by increasing labour and material costs associated with the state's robust construction market;

• Automotive fuel - up 2.9%, coinciding with increased demand from the USA and China and production delays in Iraq;

• Fruit and vegetables - up 5.0%, influenced by adverse weather conditions;

• Education - up 4.6%, coinciding with the commencement of the new school year, an increase in HECS payments for tertiary education, and an increase in secondary and primary education fees in order to cover increasing wage, IT and other operational costs; and

• Pharmaceuticals - up 9.6%, mainly as a result of the cyclical reduction in price benefits from the Pharmaceutical Benefits Scheme (PBS) safety net occurring at the start of each calendar year.

• Holiday travel and accommodation - down 5.5%, aided by shoulder season discounting of air fares to most destinations;

• Clothing and footwear - down 2.4%;

• Audio, visual and computing equipment - down 4.2%, due to continuing falls in computer prices, and competitive discounting by major retailers;

• Motor vehicles - down 1.5%, largely as a result of competition to clear 2003 stock; and

• Furniture - down 3.8%.

• Food retailing - up $27.2 million (1.4%), partly due to the flow on effects for food retailers of post-drought improvements in food production;

• Other goods retailing - up $15.8 million (4.0%), largely due to spending on pharmaceutical, cosmetic and toiletry products, as well as watches and jewellery; and

• Hospitality and services retailing - up $8.3 million (1.4%), coinciding with an increase in the number of overseas visitors to the state on holiday, coupled with a reduction in both international and domestic airfares.

• Petroleum, petroleum products and related materials - down $230 million (19.2%), mainly attributable to the temporary closure of one of the state's petroleum production sites for maintenance;

• Gas, natural and manufactured - down $189 million (23.9%), mainly due to a large decline in the price paid for the state's natural gas exports; and

• Non-monetary gold - down $170 million (10.9%), as production levels settle following the transfer of interstate gold refining operations to Western Australia in late 2002.

• Combined confidential items (including alumina, nickel, mineral sands and some agricultural products) - up $234 million (15.5%); and

• Cereals and cereal preparations - up $132 million (38.7%), mainly due to an improved wheat harvest that boosted agricultural exports following the 2002 drought.

• Miscellaneous manufactured articles - up $49 million (114.6%), partly attributable to an increase in imports of items including jewellery and articles of plastics; and

• Machinery specialised for particular industries - up $45 million (29.2%), reflecting high levels of business investment in specialised machinery and parts (including tractors).

• Nickel and cobalt - up $4.2 million (41.6%) to $14.3 million, due to high $US nickel prices fuelled by the continued strong demand for nickel from China, and the economic recovery in the US and Europe, which has improved the outlook for stainless steel consumption in these traditionally dominant markets; and

• Gold - up $0.8 million (1.4%) to $59.3 million, mainly the result of strengthening $US gold prices (up 26.5%) since March 2003.

• Iron ore - up 20.1% (9,354,000 tonnes) to 55,901,000 tonnes;

• Bauxite - up 8.1% (733,000 tonnes) to 9,743,000 tonnes; and

• Ilmenite - up 4.9% (24,000 tonnes) to 516,000 tonnes.

• Zinc - down 72.1% (44,000 tonnes) to 17,000 tonnes;

• Diamonds - down 47.8% (3,309,000 carats) to 3,612,000 carats; and

• Gold - down 11.1% (5 tonnes) to 40 tonnes.