A positive uptick in domestic job growth and strong global markets have led Deloitte Access Economics to forecast calmer weather for the national economy.
In his latest business outlook, Deloitte’s leading economist, Chris Richardson, described Australian job growth as “a thing of beauty” that looks set to remain, driven by the demand for labour and capital from strong global growth.
“The clouds around Australia’s economy are clearing,” Mr Richardson said. “China began to slow six years ago, sending a fast shockwave through national income as commodity prices fell, and a slow shockwave through production growth. Min[ing] approvals came to a halt a long time ago, but it wasn’t until this year that the already approved projects were completed. Yet those two big negatives are now mostly in the rear-view mirror.”
Looking to industry sectors, Deloitte believes that the recent surge in mining will be short-lived and won’t last for more than two years. As a result, Mr Richardson believes that healthcare will become the nation’s fastest growing industry.
“Demographics have their wicked way with the aches and pains of our ageing population,” the economist said. He also believes that the National Disability Insurance Scheme (NDIS) will also provide a boost.
Meanwhile, the global easing of inflationary risks and the related delay in the expected timing of interest rate rises have been good news for a range of service sectors. Mr Richardson said that these factors have extended the growth runway for the finance sector, allowed “some extra wiggle” room to business services and reduced the risk for wholesalers and retailers that sagging housing prices could pose problems.
“Yet interest rate rises are being delayed rather than denied and, regardless, gravity may peg growth in property services back to earth,” Mr Richardson said.