3.2 Regions and Prospects

The importance of the mining sector to Western Australia is widely acknowledged, but the mining/manufacturing value to the South West is less well recognised. Mining and manufacturing’s value is a third of the total economy and that is growing.

The region is well placed for the future in alumina/bauxite processing, and particularly in lithium-rich spodumene production. The Talison Lithium plant in Greenbushes is in the middle of a 10-year transition. Five years ago output was at 650,000t and last year it was 1.35mt with quarterly sales exceeding $2bn. By 2027 the forecast output is 2.2mt. With an anticipated mine life of more than 20 years, the Kemerton-based lithium processor, Albermarle is also expanding to meet worldwide demand.

In respect of titanium dioxide, compound annual growth rates of 5.3% are predicted through to 2032. The region’s mineral sands enterprises (Iluka and Tronox) contributed almost $900m in sales (2022).

The sectoral picture for employment is muddied since the South West is home to a significant FIFO workforce and Alcoa’s major alumina plant at Waaerup is located just inside the neighbouring Peel region but the bulk of the workforce hails from the South West with exports going through the Port of Bunbury. Mining in the South West employs more than 3,000 persons in-region, while almost that number travel outside the region for work.

Regional METS prospects are outstanding.

Note - Mineral and petroleum sales are necessarily allocated to asingle Local Government Area (LGA) and Region, even though mining andprocessing operations may be located within multiple LGAs and Regions. Sales are allocated to LGAs and Regions based on where amineral or petroleum product is originally extracted.

Agricultural land in the Bunbury region occupies 7,100km2, or 29% of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 7,700km2 or 31% of the region.

In 2020-21, the ABARES reported that the gross value of agricultural production in the South West Region was $799m, which was 9.25% of WA’s total gross value of agricultural production.

Industry classifications with more than half the State’s total contribution include: dairy production (82%), avocado(89%), potatoes (86%), apples (84%), carrots (53%), wine grapes (65%), onions (100%).

The value of wine grapesis just over $50m and the value of the wine and spirits industry iscollectively $245m (2019). However, the value that the brand image brings toMargaret River and the region as a whole is far greater. Of the South West’sfive wine sub-regions, Margaret River contributes only 2% of the national crushbut remains the standout for exports ($33m) with 59% of WA’s bottled wineexport value and 54% of wine sold in the top two price brackets at an averageof four times the Australian export average (2022). The quality underpins regionalbrand recognition and reputation for other industry sectors, particularlytourism and food.

The Geographe wine region continues to grow in reputation along with The Blackwood Valley, Manjimup and Pemberton regions.

Fisheries, particularly aquaculture, has increasingly realised its potential particularly in marron farming at Capel and abalone along the south coast. In respect of fishing, the recreational fishing industry has greater value than commercial operations, netting more than $305m pa in the South West(Recfishwest 2021).

Selected as one of 11 Regional Forestry Hubs across Australia, the South West Hub includes the South West and Great Southern regions. The lower western part of the state enjoys a natural rainfall advantage, although the 600mm precipitation line is retreating in a drying climate.

Forestry is a mix of soft and hardwood plantation, while regrowth native forest harvesting will not extend to the 2024-2033 Forestry Management Plan which will determine the use of WA’s 2.5m hectares of forest.

It is estimated that direct forestry and manufacturing accounts for more than 1,000 jobs there are more indirect and induced jobs relating to the sector.

The Dardanup timber precinct captures one of Australia’s leading particle board  manufacturers, Laminex, and Wespine which produces the vast majority of the State’s construction timbers. Koppers produces WA’s power poles. There are other local interests in chipping plantation hardwood and exports of approximately 1.3mtpa to markets in Japan and China.

Sustainable practices used in the South West add value to timber and its credentials as the ultimate renewable construction material. However, there is an estimated shortfall of plantation softwood and need for planting an additional 50,000ha to guarantee industry demand and support growth. The State Government has committed $350m to plantation softwoods while considerable opportunities exist  for private sector investment in native tree plantations.

New technologies are helping ensure that every fibre of resource is utilised and efficiencies can support opportunities in log peeling, veneers, laminated veneer lumber and a future cross laminate timber (CLT) industry.

The native  timber industry has already undergone substantial contraction while the popularity of wood is growing. Despite increasing demand, the timber resource continues to decline and without significant change this trend will only compound into the future, leaving WA increasing reliant on timber imports.

The data around tourism is fraught with challenges because it is difficult to accurately measure ‘tourism’ in an economic sense. However, there is no doubt that the benefits of tourism flow well beyond Food and Accommodation Services (FAS).

Of one tourism dollar in the South West, 52.8% of it supports Food and Accommodation Services, 11.7% supports Manufacturing output and another 18.4% supports Ownership of Dwellings and Retail Trade. Tourism contributes 6% of all jobs in the South West with a concentration of 10.94% of all jobs in the Capes Region.

ABS metrics note that the FAS category provides 4.6% of all South West jobs. However, the total of tourism jobs for the sector is 6% compared to employment across Western Australia generally at 3.5%.  

The economic value of the sector (2022) was estimated at more than $1.093bn with more than half of that in the Capes sub-region.

The strength of the sector in local employment is also its vulnerability. Global health concerns from SARS to COVID-19 have had an impact and given that the South West is noted as the seventh most tourism-dependent region in Australia across different measures (Tourism Research Australia), building resilience to manage future downturns should be treated as essential. The sharing economy has also affected businesses. Airbnb and rideshare have impacted on professional services.

Accommodation and hospitality are also traditionally less well paid than other sectors. This can be a challenge when those workers find themselves living in a tourism hotspots where living expenses are typically higher than average, with a current added complication of not enough accommodation within these tourism towns.

The region benefits from its natural beauty and proximity to the key Perth market and quality events are also strong triggers for regional visitation.

Future risk in respect of ‘flight shaming’ or travel to less accessible places could be offset by local initiatives that decarbonise tourism.

The sector employs more than a thousand people and has been growing at more than 3.5% with the Capes sub-region proving a particular attractor. The value of the sector is difficult to calculate given that it comprises advertising, architecture, art, crafts, design, fashion, film, music, performing arts, publishing, R&D, software, toys and games, TV and radio, and video games. Further complexity is added when accounting for employment that might be a mix of tasks that include creative industries work.

Interest in the South West is based upon the regional attractor, an organised cluster, tourism industry and events that support growth in the sector. Businesses within the sector can also scale their work and typically have less overheads, digital connectivity being the only prerequisite for start-up ventures.

There is ad hoc evidence indicating the sector has grown in areas of digital media, design, marketing, film, television, animation and gaming technologies. High capacity broadband has underpinned growth in this sector in a region where the creative community leaves only a very light footprint on the landscape.

Planned WA Government investment of $100m in a film studio and screen at Fremantle can only encourage the South West to continue along its growth trajectory.

Strategic opportunities relate to fast growing demand for content coming from entertainment, gaming, media and marketing. This has been true of the Busselton/Capes area where quality nationally-recognised events and festivals such as CinéfestOZ have helped fuel the sector over the past decade.

The sub-region is also a lifestyle hotspot and the NBN rollout has facilitated connectivity and therefore growth, particularly with the expansion of Business Fibre Zones to Busselton and Margaret River which helps ‘export’ creativity and serves a strong culture of entrepreneurship. The dominant driver of work is through wineries, tourism and hospitality businesses.

A shift in consumer behaviour has seen retail move from the most significant employer in the region to the third, accounting for 10.7% of all employment. It remains a majority employer in the Shire of Dardanup at 14.7%, and a major contributor to jobs in the tourism region of Augusta/Margaret River, and Busselton at 11.9% and 12.7%.  

Changes in consumer behaviour are risking those jobs and the shape of CBDs in the years ahead. Shoppers are likely to demand a more enjoyable experience and diversity, so a number of smaller and unique outlets are more appealing than a national chain. Change in retail behaviour is picking up pace, to some extent fueled by lockdown online shopping. Consumers will need a reason to visit physical outlets so creating experiential CBDs, outlets and drawcard events or activities will be important.