Next phase of mining boom begins, but no growth just yet
THE transfer from mining construction to resource exports taking off is going well, as retail and housing prospects picking up, but economic growth may not gain ground until late next year, a key analysis shows.
Deloitte Access Economics' latest June quarter business outlook has shown positive signs amid low interest rates and lingering resource project construction.
The monitor has found Queensland's economy is still doing well, thanks to a steady pipeline of new projects, while retail and housing constructing is driving growth in New South Wales.
Deloitte analyst Chris Richardson wrote the third phase of the resources boom, export volumes, were "kicking off strongly", smoothly passing from steady construction work.
"With that baton pass going well, economic growth has also been topped up by the impact of low interest rates," he wrote
"Low rates are generating more home building (which is now starting to gallop) and a lift in retail turnover growth too. But we're not out of the woods yet."
Mr Richardson wrote that there would be a gap between export gains today and when the massive LNG projects, centred in Queensland on Gladstone, kick off in 2016, while the decline in mining construction is "set to accelerate".
"And although the federal budget did little to punters' pockets in the next couple of years, people think it did cut savagely, and so consumer confidence has dropped," he wrote.
"Those factors may take some steam out of economic growth, which may ease back under trend until late 2015."
The key problem facing the economy, he wrote, remained the balance of the federal government's books, with a temporary tax boom in the past decade funding permanent policy promises.
"Yet Australia's inability to admit we have a problem may mean that the most courageous attempt at budget repair for years will founder amid opposition that includes the Senate, the states, families, motorists, pensioners, the young, unemployed, indigenous Australia, university students, ABC/SBS supporters, and a bloke named Barry who's not sure why he's annoyed," Mr Richardson wrote.