FACTBase Bulletin 9 - Perth's Economic Base

This brief Bulletin examines Perth's economic base, identifying the propulsive sectors and how this structure compares with other Australian cities.

Measuring a city’s economic base through location quotients means that any sector with a score higher than 1.0 is over represented compared to the rest of the nation, and is therefore considered a propulsive industry to the city.
In 2006, mining had a location quotient of 2.17, which means that mining is nearly twice as important for Perth’s economic base than any other single sector.
Other industries with location quotients 1.1 were construction; professional, scientific and technical services; and rental, hiring, and real estate services, all of which have direct or indirect links to the mining and resources sector.
In comparison to other Australian cities, Perth’s economic base is highly concentrated in the mining and resources sectors, however Adelaide, Brisbane, and Melbourne also demonstrated relatively high degrees of specialisation within their own economic bases, where Sydney was highly diversified.
It is important for the viability of Perth’s economy that mining remains competitive and prosperous, while the dependence on mining also suggests a need to diversify.