Saturday, June 28, 2008

A Macro Trend in Western Australia

A few weeks ago, I bought shares in Alloy Steel International (AYSI.OB -- I'll post a write-up of it here soon), a company based in Western Australia. Since then, I've started to follow the news from Perth. The big news recently has been the huge natural gas explosion on Varanus Island earlier this month, that has reduced Western Australia's gas supplies by 30%. Today, Perth Now reports that Australia's Treasurer predicts that this will hamper economic growth in Western Australia and throughout the country for the rest of the year. Alloy Steel is scheduled to open a new mill this summer, so this could affect its ability to run at full capacity.

Another article in Perth Now points to a macro trend worth noting: "Population explosion makes Perth the prime mover". Excerpt:


A NEW study has found Perth is growing at the fastest rate of any city in Australia's 200-year history.

Monash University population expert Bob Birrell said Perth's population would increase by 43 per cent between 2005 and 2021, taking the number of people living in the city from about 1.5 million to more than 2.1 million.

Dr Birrell said that would constitute the fastest rate of growth of any Australian city, at any time.

"This is absolutely massive, completely unprecedented,'' Dr Birrell said.

"It's a massive task for building infrastructure."


Time to start researching what local companies will benefit from this macro trend (infrastructure companies obviously are the first to come to mind), and then drill down further for potential investment opportunities. I'll post a follow-up after I've done some homework on this.

2 comments:

ravinsu said...

Dave,

Good luck on this blog! I hope to post my thoughts here whenever I have something worth saying.

DaveinHackensack said...

Thanks, Ravinsu. I look forward to reading your comments.