ECONOMIC OUTLOOK BRIGHT FOR 2010-11
The severe global recession has ended and there is solid recovery in train for 2010 and 2011. The commodity cycle is turning up again and with Australia is well place to take advantage of it - thanks to the aggressive Federal fiscal initiative and the Reserves Banks monetary policy easing - according to Senior economists at the Commonwealth Bank.
Why does Australia seem to have a ‘fire-proof' economy? It's more than likely been a combination of good policy and good luck:
• Monetary and fiscal policy levers have allowed large pre-emptive stimulus at maximum speed
• Well regulated financial system with banks in good shape
• Australian Housing sector in healthy condition in sharp contrast to US and UK
• Australian dollar fell by nearly 40% vs USD in late 2008 as the global financial system imploded. This was a huge boost to exporters and import competing sectors
• Australia's flexible economy poised to capitalise on global recovery led by china and emerging economies
• Australia is in the right part of the world in that many of our major trading partners in Asia continue to grow. China - Indian - ASEAN. All of which are expanding strongly
• Australia's strong population growth (high net migration intake - 300,000 in 2009).
The challenge locally of course is not only to ride the wave of national economic success but to anticipate the trends and movement in our economy especially growth and decline in specific sectors.
Strongest Growth Outlook (CBA 2010)
Groceries, food, cosmetics
Cafe, Restaurants
Retail (discretionary spending)
Outward bound tourism
Infrastructure - roads, rail, water and power
Energy related mining, construction and exports
Health, defence education - Government related
New housing construction
Sectors with downside risk (CBA 2010)
Commerical construction rental and fit out
Manufacturing - local car industry and textiles
Professional services: architect, surveyors
legal/finance
Domestic and inbound tourism
