As I am currently in Perth, Western Australia, the daily news has a very different flavour to that in the UK.

WA has made a lot of money in the last decade digging dirt out of the ground and shipping it to China as fast as humanly possible. Last year, the talk was of the distortions this boom was causing to the local job market. If a cleaner working in the mines can earn AU$100,000, who would work in a shop? Also, Australia decided to stay out of the EU so it cannot easily import loads of eager Poles to fill the gaps.

 

What a difference a year makes. Things are now so bad that economists have downgraded their projections of growth in WA to 3.5% for next year. I almost fell off my car seat when I heard that. If we had 3.5% growth in the UK, the Bank of England would be worries about overheating and be pushing up interest rates.

 

I do wonder that those projections might be a little optimistic, though. Rio Tinto have just announced a few thousand redundancies worldwide, many of which are expected to be in WA and where they lead, I expect others to follow. 

 

Australia, and WA in particular, has ridden the commodities boom spectacularly well but, if China’s cold turns to flu, there could be real problems.