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Feature Articles

 From 2012, we now list our articles in our Blog. Read the latest here

30/11/2010

The Two Speed Economy

Australia’s economy has been growing continuously for almost twenty years. However, during the past five years and particularly in recent months, the pattern of growth has been uneven, predominantly due to the mining boom.

The mining and recourses boom that began in early 2005, and which abated for a period of time during the global financial crisis, is re-emerging. There are concerns that the significant gains from the mining boom are once again largely accruing to mining-related sectors and the states where these businesses are concentrated (mining activity is largely located in Western Australia, the Northern Territory and Queensland).
 

Recent data from the Australian Bureau of Statistics indicates that new private capital expenditure in the September 2010 quarter rose 6.2% across all business sectors in Australia. But the mining sector is by far the most robust, with an increase of 15.7% for the quarter and up by 31% from a year earlier.

The mining states also appear to be attracting strong interest from skilled and experienced workers in the non-mining states. The rest of Australia is being impacted by lower growth, high interest rates and a shortage of workers, as a result of the boom (unemployment is currently 5.4%).
 
The shortage of talented workers is most concerning for businesses in New South Wales and Victoria. Additionally, workers that are staying in these states are beginning to look for new jobs, seek higher wages and push for more benefits.
 
Recently, the Governor of the Reserve Bank, testifying before Federal Parliament, noted that “growth in labour costs, is no longer declining, but rising...the overall pace could not be described as alarming at this stage, but the turning point is behind us”.
 
The next year will require some fine judgment and strong management expertise by businesses in New South Wales, especially with regard to retaining staff and attracting new employees.

Ross MacMillan holds a Bachelor of Commerce (Accounting, Finance and Systems) from the University of NSW, he is a member of the Institute of Chartered Accountants, member of the Securities & Derivatives Industry Association and a Fellow of the Financial Services Institute of Australia.

For more information on this article, call the team at Nine2three today on 1300 923 000, email  ross@nine2three.com.au or visit www.nine2three.com.au 

Important Note: These articles have been prepared for general circulation and are circulated for general informational purposes only; these articles should not be regarded as business or investment advice. The articles represent the views of the writers and are subject to change without notice. Additionally, while every care has been taken in the preparation of the articles no representation or warranty as to accuracy or completeness of any statement is given. An individual or organisation should, before any business or investment decision is made, consider the appropriateness of the information in this document, and seek professional advice, having regard to objectives, situation and needs. This document is solely for the use of the party to whom it is provided.

 

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