Crystal balls at the ready - The Aussie economy
Discussion
I've just read an interesting comment in the Sydney boating thread that got me thinking. That comment said that they felt the economy over here was heading in the wrong direction - Something which I dont get the feeling of at all.
Maybe it's because I'm isolated over here in WA and the ridiclous amount of work we have at the moment for the likes of Rio Tinto, BHP and alike.
Having been to China (from the UK) a few times this year, I agree that their economy has slowed, but given it has been growing at 9% a year for god knows how long, evan an economy slowed down of a few % will produce more demand than there was in 2006-2007.
Then there is the US economy, slowly finding it's feet, demand for consumer goods there has at least leveled and hasnt fallen for some time.
So how is the rest of Australia doing? Do we need to start a campaign for an independent state of WA and introduce the WA dollar ?? Cant have you lot over on the east coast dragging us down!
Maybe it's because I'm isolated over here in WA and the ridiclous amount of work we have at the moment for the likes of Rio Tinto, BHP and alike.
Having been to China (from the UK) a few times this year, I agree that their economy has slowed, but given it has been growing at 9% a year for god knows how long, evan an economy slowed down of a few % will produce more demand than there was in 2006-2007.
Then there is the US economy, slowly finding it's feet, demand for consumer goods there has at least leveled and hasnt fallen for some time.
So how is the rest of Australia doing? Do we need to start a campaign for an independent state of WA and introduce the WA dollar ?? Cant have you lot over on the east coast dragging us down!
I think you have to look at different industries... a friend who works in the coal mining industry says they are definitely feeling the pinch but I think this is a slow down in the rate of growth rather than a decline in the actual export volumes. The mothballing of some huge projects would seem to suggest a slow down as well but I think this is also largely due to the strong dollar erroding expected profit margins. Having said that other related industries are picking up, Coal Seam Gas etc....
Finance (or atleast my part of it) seems to be quieter than previous years but I would not say its depressed, down but buoyant I would say. There are opportunities out there still.
Issues are the strong Aussie dollar on exports and the decline of growth in China and if anyting hurts us this will be it, however this won't happen overnight and the RBA still has some room for easing the strength of the local currency. The automotive industry is on its way out but I don't think has a significant impact on the Macro economy.
Is it the very best of times for Australia right now? No. Is it better than most of the Western world?... almost certainly, there is a lot of money to be had in the mining sector still for example... I work for an Inv Bank and the guy next to me quit and is going to work in the mines and is getting a siginificant payrise.... almost to the point of me joining him! But not quite.
Thats my 2c anyway. I am staying put.
In essence we are in a recessionary period as a globe. Australia is a pretty good place to be in a this downturn. The real question is when the up turn comes, where is the best place to be then?
Finance (or atleast my part of it) seems to be quieter than previous years but I would not say its depressed, down but buoyant I would say. There are opportunities out there still.
Issues are the strong Aussie dollar on exports and the decline of growth in China and if anyting hurts us this will be it, however this won't happen overnight and the RBA still has some room for easing the strength of the local currency. The automotive industry is on its way out but I don't think has a significant impact on the Macro economy.
Is it the very best of times for Australia right now? No. Is it better than most of the Western world?... almost certainly, there is a lot of money to be had in the mining sector still for example... I work for an Inv Bank and the guy next to me quit and is going to work in the mines and is getting a siginificant payrise.... almost to the point of me joining him! But not quite.
Thats my 2c anyway. I am staying put.
In essence we are in a recessionary period as a globe. Australia is a pretty good place to be in a this downturn. The real question is when the up turn comes, where is the best place to be then?
TAS1981 said:
I think you have to look at different industries...
That is the way I see it too. They are still exporting loads of minerals but project expansion has slowed down. There are some massive Iron ore and Gas discoveries to sort out or coming online in the future especially in WA. If they sort out Olympic Dam in SA, that would be another massive increase.In the last 10 days or so there have been announcements of job cuts in the coal mines of about 2,000 people.
Obviously they are feeling the pinch, however a mate of mine in human relations in the industry tells me that so far they are just getting rid of what was over hiring at the peak of the boom.
However he did also say he was glad that the mine he hires for actually is contracted to supply a large local power plant, not export.
Obviously they are feeling the pinch, however a mate of mine in human relations in the industry tells me that so far they are just getting rid of what was over hiring at the peak of the boom.
However he did also say he was glad that the mine he hires for actually is contracted to supply a large local power plant, not export.
I went to a macro economics lecture at Melbourne Uni's Faculty of Business and Economics last night - given by Professor Martin Wolf - the FT Economics Editor. He described the Western world as having been in a "contained depression" for the last 5 years and doesn't see it emerging for at least another 5, if at all. It has been contained only because major Western powers are printing money like there's no tomorrow, and the crunch will come when (not if) this no longer works (ie pushing on a piece of string), or creates hyper inflation. China has enough problems of its own (and no one seriously believes statistics that it produces anyway). If the world collapses into another downward leg of the crisis, Australia won't be unaffected, but having said all that, I can't think of a better place to be right now.
PS A lot of engineering firms in Perth are short of projects and cutting back staff.
PS A lot of engineering firms in Perth are short of projects and cutting back staff.
ukdennis said:
...I can't think of a better place to be right now.
I think this is the key thing. The world is depressed, where do you want to be right now? Personally Australia has more wriggle room than most and the sun shines.When / if things change and thats no longer the case I will re-evaluate! If there is an upswing in the uk market I should be able to take advantage so right now I think i am ok....well apart from working in a shrinking ever more regulated financial institution....
Bibbs said:
Mild drop in the AUD too (not good when I'm looking to buy stuff from overseas).
Last ten years of the AUD v USDhttp://www.xe.com/currencycharts/?from=AUD&to=...
Gold price in past 10 years.
http://www.kitco.com/charts/popup/au3650nyb.html
Expansion has slowed I reckon but as I have mentioned elsewhere before there is still way more mining projects built now than 5 years. When they start to close mines then it might go wobbly. Yes, Coyote was closed a few weeks ago, but I reckon that would be its location hurting it. Miles from anywhere.
The elephant in the room is public sector spending is entirely out of control already and spiralling into oblivion. The loss of any chance of super-revenue from resources means that this rapidly increasing deficit will need to be propped up by increased taxation of the common man.
Politicians keep talking about temporary tax measures such as the disability levy on medicare dropping off when the country returns to surplus but many of the less politically motivated commentators suggest this could be a five year journey. From what I've seen of public finances in my six weeks in work so far (all publicly available stuff) I'd suggest they're right.
My view is that the economy will not tank, but there will be an extended period of stagnation in jobs/housing/economic growth causing a readjustment of the AUD as confidence reduces.
Perfect for me with a large wedge in the UK and a desire to buy a house!
Politicians keep talking about temporary tax measures such as the disability levy on medicare dropping off when the country returns to surplus but many of the less politically motivated commentators suggest this could be a five year journey. From what I've seen of public finances in my six weeks in work so far (all publicly available stuff) I'd suggest they're right.
My view is that the economy will not tank, but there will be an extended period of stagnation in jobs/housing/economic growth causing a readjustment of the AUD as confidence reduces.
Perfect for me with a large wedge in the UK and a desire to buy a house!
200bhp said:
I think it's fairly safe to assume that Gillard wont make another term, so are the opposition are more likely to address the issues?
Maybe if the miners paid a bit more than their current 14% tax it could be a bit better and who knows if Gina, Clive & Twiggy pay anything.
suthol said:
Maybe if the miners paid a bit more than their current 14% tax it could be a bit better and who knows if Gina, Clive & Twiggy pay anything.
The difference is that Norway put all of their money into a well managed conservative sovereign fund and Australia pissed it up the wall thinking it would last forever.
The penchant for poorly thought through policy which offers fast political headlines at the expense of sizeable future implications is quite staggering at both a state and Fed level here.
The penchant for poorly thought through policy which offers fast political headlines at the expense of sizeable future implications is quite staggering at both a state and Fed level here.
Hitch78 said:
The difference is that Norway put all of their money into a well managed conservative sovereign fund and Australia pissed it up the wall thinking it would last forever.
The penchant for poorly thought through policy which offers fast political headlines at the expense of sizeable future implications is quite staggering at both a state and Fed level here.
Can we vote for the Norwegian Prime minister at the next election The penchant for poorly thought through policy which offers fast political headlines at the expense of sizeable future implications is quite staggering at both a state and Fed level here.
....admittedly don't think he/she will like my cars!
Hitch78 said:
The elephant in the room is public sector spending is entirely out of control already and spiralling into oblivion. The loss of any chance of super-revenue from resources means that this rapidly increasing deficit will need to be propped up by increased taxation of the common man.
Politicians keep talking about temporary tax measures such as the disability levy on medicare dropping off when the country returns to surplus but many of the less politically motivated commentators suggest this could be a five year journey. From what I've seen of public finances in my six weeks in work so far (all publicly available stuff) I'd suggest they're right.
My view is that the economy will not tank, but there will be an extended period of stagnation in jobs/housing/economic growth causing a readjustment of the AUD as confidence reduces.
Perfect for me with a large wedge in the UK and a desire to buy a house!
And buying a house with A$ funded from pounds just now...........madness. Just saying like.Politicians keep talking about temporary tax measures such as the disability levy on medicare dropping off when the country returns to surplus but many of the less politically motivated commentators suggest this could be a five year journey. From what I've seen of public finances in my six weeks in work so far (all publicly available stuff) I'd suggest they're right.
My view is that the economy will not tank, but there will be an extended period of stagnation in jobs/housing/economic growth causing a readjustment of the AUD as confidence reduces.
Perfect for me with a large wedge in the UK and a desire to buy a house!
So with the quarter percent drop in the base rate and Soros' golden child declaring the AUD is going to slam hard, is now the right time to whip some savings over to the UK and sit on it at the moment?
How hard do we think the AUD is going to fall if much at all?
I am a little sceptical againstt he GBP, I imagine it will fall more dramatically against the USD, but really other than the small rate drop ....what has changed to produce a big drop? Or are we just becoming too uncompetitive?
On a side note I see MacLaren have lopped off 100k from their cars here in Aus as they (rightly) reckon we get ripped off here....though I think it has rather more to do with them undercutting obstinate competition than an altruistic sense of whats "fair"!
How hard do we think the AUD is going to fall if much at all?
I am a little sceptical againstt he GBP, I imagine it will fall more dramatically against the USD, but really other than the small rate drop ....what has changed to produce a big drop? Or are we just becoming too uncompetitive?
On a side note I see MacLaren have lopped off 100k from their cars here in Aus as they (rightly) reckon we get ripped off here....though I think it has rather more to do with them undercutting obstinate competition than an altruistic sense of whats "fair"!
I think the AUD didn't really rise, it's just everyone else fell quicker and we got left behind.
I can see the USD getting better, but I can't see why GDP or EUR would be a better bet.
I think the AUD will weaken till the election and then, once Guillard is out, it'll strengthen again.
But then I'm in IT, not economics.
I can see the USD getting better, but I can't see why GDP or EUR would be a better bet.
I think the AUD will weaken till the election and then, once Guillard is out, it'll strengthen again.
But then I'm in IT, not economics.
From my point of view it's a good thing if the AUD weakens against the USD - Its going to make it cheaper for the Chinese to buy all that dirt, reducing their costs and strengthening their economy. Lets face it our mining sector is propped up by Chinese demand so whats' good for them is good for us.
I wonder what will happen when other countries such as those in Africa in which the Chinese are investing, come on-stream with their raw materials?
I wonder what will happen when other countries such as those in Africa in which the Chinese are investing, come on-stream with their raw materials?
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