PERTH, Australia — Michael Smith moved 2,500 miles across Australia in July to earn $80,000 as a blaster. Now the 30-year-old explosives expert is a motorcycle courier making half that much.

In Western Australia, his new home, a mining boom that drove 17 years of economic growth in the southern continent has collapsed. Commodity prices have slumped in the global credit crisis, prompting companies to cut production and jobs.

For the past three years, Western Australia's expansion rivaled China's, its biggest export market, peaking at 14 percent in the second quarter of 2006. With growth forecast to drop to 1.5 percent by 2010, the state may not be able to prevent Australia's first downturn since 1991.

"I've never seen anything like this," said Mike Young, 48, managing director of Western Australian iron-ore explorer BC Iron Ltd. "The severity and speed of the crash was incredible." The market value of BC Iron, which is due to begin production next year, fell 88 percent in 2008.

Australia skirted the Asian financial crisis in 1997 and the dot-com bust in 2000. It may not be so lucky this time. The economy grew 1.9 percent in the third quarter of 2008, the weakest annual pace in more than five years. Western Australia contributed to half of that expansion.

The state "was a driver of the strong growth we were having until recently," said Shane Oliver, senior economist at AMP Capital Investors in Sydney. He predicts Australia will follow the U.S., Japan and Europe into recession this year.

"The boost to national income from commodity prices flowing through Western Australia is going from a boom to a bust," he said.

Bigger in size than Alaska and Texas combined, Australia's westernmost state is rich in gold, iron ore, gas, diamonds and bauxite. A year ago, companies in Perth — an oceanside city with 1 million square miles of mineral-rich outback — were struggling to find workers in a state with just 2.1 million people, one-tenth of the national population.

Oil producer Woodside Petroleum Ltd. and miner Minara Resources Ltd. were among firms offering engineers, electricians, builders, truck drivers and miners wages as much as twice what they could earn in eastern states.

Now businesses are firing employees as they reduce output and dump expansion plans.

BHP Billiton Ltd., the world's largest mining company, said Wednesday that it will close a nickel mine in Western Australia and eliminate 1,750 jobs.

Rio Tinto Group, the world's third-biggest mining company, is slowing a $1.24 billion expansion of its Argyle diamond mine, cutting up to 200 workers.

Western Australia's unemployment rate jumped in November more than any of the country's other states, to 3 percent from a record-low 2.3 percent in October. The national rate is 4.5 percent. The slowdown is taking its toll on a Perth housing boom that drove up prices 146 percent between 2002 and December 2007. The cost of housing fell 11 percent last year.

Caught in the downturn, motorcycle courier Smith is contemplating selling two houses he bought with borrowed money unless he can find another high-paying mining job.

"When I came over, there was plenty of work and everyone was making money," he said. "I've applied for everything, but a lot of the mining work is frozen now."