The development of Perth and Western Australia has been defined by booms. First came the gold rush of the 1890s; now the world’s insatiable demand for the iron ore, alumina and natural gas that abound in the state’s huge interior is driving the development of one of the most isolated metropolitan areas on Earth.

As China, in particular, hoovers up the world’s natural resources to feed its growth, so Western Australia’s economy has cashed in, nearly doubling in size to A$140 billion (£60 billion) in only six years, according to Alan Carpenter, the state premier.

Where once prospectors flocked west to seek their fortune in the gold-fields, now about 1,000 people a week move to Western Australia. The state is home to about two million people, although that is only 10 per cent of the Australian population in an area that accounts for one third of the continent.

There they find a famously attractive lifestyle – and jobs. Despite the influx of people, there are 27,000 employment vacancies in the state, according to the most recent figures for 2007. Francis Logan, the minister for energy, resources, industry and enterprise, says that labour shortages were being felt across the board.

Mining companies have trouble finding enough engineers and skilled tradesmen; the agriculture and service industries are losing workers attracted to the wages offered by the resources sector – many restaurants and cafés in Perth have a “staff required” notice in the window – and there is a shortage of teachers and of other civil servants. A recent report by the Western Australian Chamber of Commerce and Industry forecast that an additional 400,000 workers would be needed in the state in the next decade. Unless measures are taken to significantly increase the labour force, there will be a shortfall of 150,000 employees, according to Deidre Willmott, the chamber’s executive director of policy.

Mr Carpenter believes that it is still too difficult for companies to recruit workers from outside Australia. He hopes that Chris Evans, the Immigration Minister in the recently elected federal Labor Government and a fellow Sandgroper – Western Australian – will heed calls to loosen the regulations. But immigration is a notoriously controversial issue in Australia and the minister said this week that he had no plans to make it easier to obtain skilled temporary migrant visas.

Richard Goyder, the chief executive of Wesfarmers, the retail to insurance group, says that ensuring a supply of skilled workers will be the biggest challenge for Australian public companies in the next decade. Last month his company completed the country’s biggest takeover, of Coles, the super-market chain, making it Australia’s largest retailer.

Although being thousands of miles from Sydney and Melbourne can be a hindrance to businesses based in Perth, Mr Goyder says that the distance allowed Wesfarmers to “come in under the radar” and snap up a 10.6 per cent stake in the retailer after the collapse of a private equity deal earlier in the year.

He is one of many cheerleaders for the city: “Perth is a brilliant place to live and it has the most wonderful lifestyle.” The claim is difficult to dispute; Perth has a pleasant, Mediterranean-like climate, there are superb beaches, the traffic flows freely and there are world-class educational institutions and sporting facilities.

Yet there are some clouds on the horizon. The resources boom has seen house prices rise steeply, with the average rent for a three-bedroom house in Perth now outstripping Sydney prices at A$300 a week.

The spiralling cost of living and relatively high income tax are barriers to attracting top-level talent to the city, argues Kevin Davidson, the chief operating officer of Maxwell Drummond, an executive search firm for the energy and natural resources sector that has just opened an office in Perth.

“The resources boom is going to continue for some time and companies will have to be more innovative about how they attract people and where they get them from,” he says. “They need manpower plans that look as far ahead as possible, because the time it takes to hire someone is getting longer, as most companies are being forced to look internationally.”

Nevertheless, Mr Davidson points out that Perth is still “probably the most attractive destination” for senior executives in the sector, at the expense of cities such as Houston, Texas, and Calgary, Alberta.

Rio Tinto, which has a vast iron ore mining operation in the Pilbara area of the state’s northwest, has hired 2,000 staff this year. Warwick Smith, the acting chief executive of the iron ore division that is run from Perth, says that the miner needs to keep going at that rate to meet its expansion targets. Rio wants to produce more than 300 million tonnes of iron ore from the Pilbara by 2013, up from 190 million this year.

Many of its workers live in Perth and fly in for a two-week stint before returning home for a seven-day break. The inadequacy of Perth’s airport is a familiar refrain; Mr Goyder brands the domestic terminal “a disgrace”. A big expansion of the airport is planned.

The broader issue in the long term is how to keep the economies of Perth and Western Australia strong when the resources boom eventually comes off the boil. Mr Logan says: “We want to ensure that when the party’s over we have a ‘beyond the boom’ strategy.” The state government is fostering the biotechnology and health sectors, information technology – 60 per cent of the world’s mining software is produced in Western Australia – biofuels and renewable energy, and shipbuilding. Many English Channel crossing ferries are made in Perth.

A flight to Singapore takes less than five hours – a little longer than a trip to Sydney – making Perth well positioned to take advantage of the Asian market. It is also in the same timezone as many cities in the region.

Perth’s failing, perhaps, is a lack of vibrancy. The central business district can feel like a big country town outside office hours. Lisa Scaffidi, the new Lord Mayor, wants to cut the considerable red tape that deters small retailers and restricts Sunday trading and to encourage more inner-city living.

Charles Landry, a respected “urban innovator”, was brought to Perth to get the city thinking about its future. He says: “Perth stands at the cusp of rare opportunity . . . Seize the moment. Think well ahead and future-proof Perth beyond the super-cycle.”

Founding father

— Origin of name Founded by Captain James Stirling on August 14, 1829, as the political centre of the Swan River free settler colony. He chose the name supposedly to honour Sir George Murray, then Secretary of State for the Colonies, who was born in Perth, Scotland
— Area 5,000 sq km
— Population 1.5m
— Density 300 people/sq km
— Annual economy A$67 bn (£29 bn)
— Exchange rate £1 equals $2.30
— Cost of living loaf of bread $3.60 (£1.56)
— Visa regulations Tourist visas are required for UK citizens and can be obtained online
— Timezone GMT+8 hours
— Website cityofperth.wa.gov.au
— Airlines offering flights from London to Perth include Qantas, a British Airways partner; Cathay Pacific, Singapore Airlines, Emirates, Malaysia Airlines and Thai Airways

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