Monday, March 4, 2013

Solid average growth amid continued structural volatility for Australian economy

The Australian economy is far from any sort of medium-term steady state. That means that we can look forward to a continuation of the structural volatility that has characterised the past decade. That is the key message from BIS Shrapnel’s Long Term Forecast Update Report and the company’s forthcoming Business Forecasting conferences.

The boost to government investment associated with the stimulus package is now being wound back aggressively. The extraordinary stimulus to GDP from the recent minerals investment boom is receding and will turn negative as minerals investment recedes from peak levels. BIS Shrapnel sees residential investment stepping up as the next phase, with activity strengthening through to the middle of the decade. After that, they expect the main driver of growth to be non-mining business investment.

Contact: Tim Hampton