Western Australia's resources sector will see a sharp contraction in its workforce over the upcoming decade, in tandem with an increase in FIFO work arrangements.

A new report indicates that the number of people employed by the Western Australian resources sector is set to slide by nearly 20 per cent in a decade, falling to from 105,200 at present to around 87,000 workers in 2025.

According to the WA Resources Sector Outlook 2015 – 2025, the chief factors behind the job decline include a transition from the construction to the operating phase of major resource projects, in tandem with tepid commodity prices which will further erode demand for staff.

“The sector is now largely in the operational phase as previously forecast,” said the report. “This will see a further decline in the overall workforce, particularly construction.”

The state’s resources industry will shed as many as 17,300 construction jobs by 2020, a fall that is expected to be only moderately offset by growth in operational staff of around 4,300 new workers by 2019.

This increase in the operational workforce will in turn be eroded, however, by as many as 800 redundancies the following year.

Despite the projected shedding of nearly a fifth of its workforce in a decade’s time, the resource sector will still remain a major source of employment for Western Australia, employing twice as many people as it did in 2004, prior to the China-backed mining boom.

The shift from the operating to construction phase will also change the nature of the workforce and industry work arrangements, with a dramatic increase in FIFO employees.

“FIFO will continue to be an attractive workforce model, providing choice for employees,” said the report. “FIFO work arrangements must be supported by governments, and resources sector companies must continue to engage with communities to demonstrate the opportunities these arrangements provide.”

According to the report, labour productivity is expected to rise by 40 per cent by 2017 and continue to grow before plateauing in 2025.

The Outlook was developed by economics advisory Deloitte Access Economics at the behest of the Chamber of Minerals and Energy of Western Australia (CME), which bills itself as the leading advocate for the resources industry in the state.

The Outlook was first published in 2009 and is currently in its fourth iteration, following updates in 2011 and 2013.