What does minerals growth mean to Western Australia?

Abstract

In this paper we investigate the extent to which the high growth of the minerals sector has been responsible for the buoyant performance of the Western Australian (WA) economy. In particular, we analyse what the WA economy would look like had the growth in minerals not taken place. We develop methods to decompose the observed growth in the economy into minerals and non-mineral components. It is estimated that once the direct and indirect effects are properly accounted for, the minerals sector is responsible for about 40% of the growth in the WA economy over the 1990s—about twice its average share in gross state product. Interestingly, we find that service sectors, such as Transport, Wholesale and Retail trade and entertainment, and Education, health and welfare, would be substantially smaller had the minerals sector stagnated.