Economist warns there are more hard times ahead for the Australian economy
Australia’s economic outlook is shaky, a senior economist warns transport leaders in Melbourne.
National Australia Bank’s James Glenn provides a mixed forecast of the national business environment for the Victorian Transport Association’s (VTA’s) Freight Outlook forum.
He expects unemployment – currently at 6.3 per cent – to continue rising over the course of 2015, to peak at 6.7 per cent towards the start of the new year.
This is because the economy appears unlikely to replace jobs being lost through the downturn in the mining sector, the shrinking of the federal public service, and the wind-down of automotive manufacturing.
“Employment needs to grow at around 210,000 [jobs] per annum to keep unemployment from rising,” Glenn says.
“It only increased by 100,000 last year.”
Not helping matters is a general uncertainty around business regulation and policy – which is weighing on the confidence of both businesses and consumers. That, in turn, is likely to reduce demand for transport services at each point in the domestic supply chain.
“Consumers are highly anxious about (both) the cost of living and job security,” Glenn says.
On the positive side for transport operators is the relative strength of Australia’s major trading partners – which should encourage export trade.
The US appears to have now recovered from the global financial crisis, and China – whose share of Australian exports grew significantly during the mining boom – is also still growing its economy, albeit at a slower rate than previously.
Glenn says the Japanese economic recovery appears to have dropped off, but this has been balanced by the improving situations of economies in Southeast Asia, including Singapore, Indonesia and Vietnam.