Deloitte`s definition of Australia`s economic outlook is "engine roar," and let`s focus once again on the growth base and growth potential of this "lucky country".
At the start of 2017, it may really take courage to assume that the global economy, including Australia, will outperform itself. However, the signs of economic recovery are gradually becoming a prairie fire, may become a consensus. China is driving growth, India seems to be on the verge of a months-long cash crisis, New Zealand`s economy is on track, U.S. economic data are beginning to benefit from rising business spending, and Germany and Japan are in full employment. Overall, the global economy seems to be happy in 2017, the situation is strong.
Deloitte (Deloitte) `s definition of Australia`s economic outlook in the 2017 Quarterly Business Outlook Quarterly is the "engine roar" (All Engines Firing), listens to more economists sing about the local economy and watch politicians roar at the moment of crisis. Deloitte`s announcement has refocused our eyes on Australia`s growth base and development potential as a "lucky country".
"there`s a lot of good things."
Australia`s economy is doing a lot of work. Demand from China has led to a surge in Australia`s national income, the last time it was at the peak of a boom in the resource industry. Since late 2011, Australia`s money bags have shrunk. The so-called "income recession" continues to this day. The extinction of the mining boom is not quiet, more like a mine, the end.
A large number of mines, oilfields and gas wells have been put into use in the high-speed development of the resource industry in the past few years, and now they are in line with China`s appetites, and export revenues can be said to be rolling in. After many years of downturn, Australia`s main resource products price rebound, sales revenue inflation.
The Deloitte report noted that the Reserve Bank of Australia cut interest rates twice in 2016, further boosting housing prices, resulting in a significant increase in wealth. At Christmas 2016, 9.23 million Australian households had a combined net worth of A $94 trillion. The average family has a million seats.
The good news is more than that. The winter rain of 2016 is timely, and the price of property is not bad. Even after tropical storm Debbie, farm yields have been the best in recent years. Last year, when corporate profits soared, and the tight federal budget was short-lived, goverment everywhere offered money to build new roads. And with high housing prices, the East Coast states of the budget table has increased a lot.
Positive expectation: low wage will now inflection point, low interest rate will continue to improve fiscal and tax performance
Wage income, the biggest component of prices, hit an all-time low and inflation fluctuated slowly, ACB News reported. However, the report says rising pressure on prices around the world is growing, commodity prices are sound, Australia`s low wage-income rate is likely to come soon, and inflation is expected to rise in turn. But Richard (Chris Richardson), a partner at Deller`s accounting firm, said both rising inflation and rising wages would be mild and slow.
Richard Richardson said Australia`s interest rates remain low for a long time, low-interest loans have become the norm. But the global market economy recovers, inflation strengthens, in the next few years choose to raise interest rate will be inevitable event. But he does not expect Australia to start raising interest rates until 2018. With house prices high, central banks will not allow the situation to worsen further, while global monetary easing has not yet been broadly tightened. With this in mind, Richarson reckons that the Australian dollar will remain close to its current level throughout 2017.
Iron ore, coal and other resources are at high prices, and natural gas projects started a few years ago have also been put into production, driven by the strong export of resources. Deloitte expects that in the coming months, Australia will surpass the Netherlands. To be the longest country in the world for sustained economic development.
How long will the drive from the resource industry last? Richarson believes the good will last at least in fiscal years 2017 and 2018. There is no direct relationship between export income and employment growth, but it is bound to have a positive impact on the job market.
High home prices, rapid tax growth in some states, and increased federal budget revenues-China`s contribution is not small. As a result of these welcome changes, the goverment budget is no longer stretched and the national fiscal and tax situation has improved significantly, the report said.
Australia is slowly recovering from the peak of its fiscal deficit reached in late 2009, and has made considerable progress. "the improvement in the deficit is a direct indication that the two engines of soaring demand in China and soaring home prices support national taxes at the same time."
However, it remains to be seen how long this combination of driving forces can exist, according to Richarson.
Reshuffle of preponderant industries
According to Deloitte`s (Deloitte) report, Australia`s economic growth in the next few years will continue to depend largely on ore mining, according to ACB News. After a pre-investment boom, Australia is now entering a production boom and resource extraction has skyrocketed.
At the same time, demographic changes-Australia`s larger proportion of older people-have pushed the healthcare industry forward. Mining output is likely to shrink in a few years` time, while the healthcare industry will grow. In some ways, Australia`s demand for health care is growing more steadily than China`s demand for resources, the report said.
Other industries in the service industry are also booming. Low-interest loans and high house prices are good for the financial sector. The Internet has profoundly changed the way information is integrated and processed. Big data and low interest rates combine to strengthen business development. In addition, online retail and network security will also be potential.
For the current major industries, it can be said to be mixed. The globalization of market supply is good for related industries such as education, such as studying abroad, and bad for manufacturing (with the exception of food manufacturing). When the property market eventually turns to cooling, the property services and construction industries will also enter a slow period.
On the other hand, state goverment controls house prices while increasing transport infrastructure to spend tax revenues from high-premium asset sales. In addition, there has been a huge increase in agriculture.
Regional chapter: the situation of the two-speed split continues to change quietly
China`s economy has experienced a recovery and rebound, but overcapacity remains grim, with continued pressure on Western Australia, Queensland, and the North Territory, which has always relied on mineral demand, commonly known as the "Sunshine Zone". Overall, according to Deloitte, Australia`s economic growth is still dominated by ACT, and Victoria.
New South Wales has been the biggest and only beneficiary of Australia`s economic-related good events over the years, such as the low interest rate policy`s boost to NSW real estate. However, Richarson also cautioned that this need to be viewed rationally, often too quickly, the more trouble accumulates.
Victoria has gained strong support from the general trend of recent years, especially as the low exchange rate has provided a loose monetary environment for the state`s core manufacturing, education and agriculture. A dramatic increase in the population is also one of the driving forces of the state`s economic development.
Queensland economic growth has always been robust, employment growth rate is more moderate. The increase in natural gas exports has contributed a huge development dividend to the state.
Western Australia is still suffering from an earlier slowdown in China`s economy, which has lacklustre growth. However, with the completion of large-scale natural gas projects and put into production, natural gas exports will bring some support. A steady rebound in China`s economic recovery means that the worst of Western Australia will pass and slowly emerge from the gloom.
Tasmania is booming, maintaining a relatively healthy pace of development. The state`s job market is improving, commodity retailers are growing well, and manufacturing and tourism are enjoying the benefits of a low exchange rate. However, the report believes that the Tazhou economic base is thinner, long-term growth rate is too warm and.
As the construction of the goliath Ichthys project is about to be completed and put into production, the resources sector of the Northern Territory is slowly flourishing. The report argues that despite the slow pace of economic development and the challenges faced by the region, the long-term development potential is enormous.
The fastest growth in the (ACT) economy in the Australian capital region depends on two factors-how the federal goverment uses budget spending and how the Reserve Bank treats interest rate policy-which are shifting in the direction of a good Canberra economy.
