Perth - Economy

Economy

By virtue of its population and role as the administrative centre for business and government, Perth dominates the Western Australian economy, despite the major mining, petroleum, and agricultural export industries located elsewhere in the state. Perth’s function as the State’s capital city, its economic base and population size have also created development opportunities for many other businesses oriented to local or more diversified markets.

Perth’s economy has been changing in favour of the service industries since the 1950s. Although one of the major sets of services it provides are related to the resources industry and, to a lesser extent, agriculture, most people in Perth are not connected to either; they have jobs that provide services to other people in Perth.

As a result of Perth's relative geographical isolation, it has never had the necessary conditions to develop significant manufacturing industries other than those serving the immediate needs of its residents, mining and agriculture and some specialised areas, such as, in recent times, niche ship building and maintenance. It was simply cheaper to import all the needed manufactured goods from either the eastern states or overseas.

Industrial employment influenced the economic geography of Perth. After WWII, Perth experienced suburban expansion aided by high levels of car ownership. Workforce decentralisation and transport improvements made it possible for the establishment of small-scale manufacturing in the suburbs. Many firms took advantage of relatively cheap land to build spacious, single-storey plants in suburban locations where parking, access and traffic congestion were minimal. "The former close ties of manufacturing with near-central and/or rail-side locations were loosened."

Industrial estates such as Kwinana, Welshpool and Kewdale were post-war additions contributing to the growth of manufacturing south of the river. The establishment of the Kwinana industrial area was supported by standardisation of the east-west rail gauge linking Perth with eastern Australia. Since the 1950s, heavy industry has dominated the location including an oil refinery, steel-rolling mill with a blast furnace, alumina refinery, power station and a nickel refinery. Another development, also linked with rail standardisation, was in 1968 when the Kewdale Freight Terminal was developed adjacent to the Welshpool industrial area, replacing the former Perth railway yards.

With significant population growth post-WWII, employment growth occurred not in manufacturing but in retail and wholesale trade, business services, health, education, community and personal services and in public administration. Increasingly it was these services sectors, concentrated around the Perth metropolitan area, that provided jobs.