May 19, 2014

The five waves that could wipe out the Australian economy this year

The waves washing over the Australian economy won't wipe us out in themselves. But the convergence of them this year could flood attempts to refloat the economy.

The Australian economy is ploughing into rising swells. There are five waves headed our way that might be rideable in isolation but if they converge would represent a perfect storm. Consider. The structural backdrop for the economy is the mining investment cliff. Although it began two quarters ago, it is not until the second half of this year, probably Q3, that it begins to hit the employment market proper through the wind down of building and structures investment. It has a long way to fall after that (note the green line):

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8 thoughts on “The five waves that could wipe out the Australian economy this year

  1. paddy

    Gawd you’re an optimistic bugger.
    *Buys tinned goods and Hides under doona.

  2. pinkocommierat

    Imagine the pickle we’ll find ourselves in once the fat lady has sung. The horse will have bolted, if not over a cliff, then into the cruel swells of a raging economic sea. Like David L-S, I intend on mixing my metaphors ’til the cows come home. while Rome burns, the dollar happily levitates and the cows come home.

  3. pinkocommierat

    My crappy tablet device submitted my post while I was in the middle of editing it. What a way to learn my lesson about being a smartarse online… Serve me right!!!

  4. Chokyi Nyingpo

    Next weeks ANZ-Morgan survey should prove even more enlightening as to how consumers feel about this government.

    Interestingly, this has shown there to be a consistent downward trajectory since Abbott came to power last September.

    Though it went up for the two months prior to the election and jumped around that same level after it, consumers obviously thought times would get better with a change of gov’t.

    But more significantly than that the trend is Abbott has *never* got consumers to feel as good as they did when Rudd made them feel so much better in 2009/2010.

    Tellingly, Abbott’s consumers are now even unhappier than at any time during Gillard!

  5. David Hand

    I would have thought that the end of the mining investment boom, where resources companies cease buying Australian dollars to build the infrastructure, and the collapse of commodity prices, would put downward pressure on the dollar.

    After all, that’s what drove it upwards on the 2000s.

  6. AR

    During the so-called ‘mining boom’- actually manic building of bigger & bigger holes to glut supply, I was bemused that the $mart money didn’t twig that when supply exceeds demand price drops yet here they were attempting to outdo all previous manias of oversupply.

  7. Bill Gates

    You left out the 6th Wave!
    The bad Discriminating Policies of the Abbot & Costello Liberal Party.
    What directly affects the Performance of any economy is the FIDDLING of Governments with restrictive and penalty type Legislation that takes away Consumer Confidence.
    Not that I believe the Other Mob are any Better!
    Both Labour & Liberal Parties have been extremists in Government…both either too far Right or Left!
    Hope people wake up that Donkey ! or Donkey 2 are no longer worthy of their PRE-SOLD Votes!

  8. Leslie Graham

    And of course the other obvious attempt at economic suicide is Abbotts decision to opt out of the new global industrial revolution.
    His making investment in stranded assets a priority over investment in renewables (the fastest growing industrial sector on Earth by an order of magnitude)would roughly equivalent to Britain investing in water wheels instead of steam turbines back in the mid 19th century.
    We are handing the driver for the 21st century to China, Germany, Brazil and even bloody Mexico on a plate.
    Could he possibly be an more stupid?

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