The Deloitte Access Economics team is to release its December 2013 edition of its Business Outlook today. Business Outlook provides commentary and forecasts for economic indicators and is designed for business analysts and strategic managers. Subscribers to this publication are from all industries including Government. Visit the DAE website.
I find this publication an invaluable tool for identifying areas of industry that are in distress and understanding the levers that can be used to assist clients navigate their way forward.
Interestingly is that this edition of the Business Outlook indicates that the big levers of sectoral growth are on the move:
• Announcements from the likes of Holden show that manufacturing continues to be in trouble. In the past three decades this industry has halved as a share of Australia’s economy and workforce. However, the bigger picture is that the slower parts of Australia’s two speed economy (which includes not just manufacturing, but also sectors such as retail, tourism, and the utilities) are now showing signs of improvements.
• However, at the same time as the slow bit of the economy is getting better, the strong bit is getting worse. Whilst mining output gains will continue to be significant, having grown 20% through 2012 and 2013, the slowdown is evident in construction (led unsurprisingly by the shrinking construction spend by miners now that the mines have been developed and “built out”).
• The group of sectors which are mostly government funded – the public sector, plus education and health – look set to maintain trend growth despite all the hoopla about government cutbacks.
In support of the improvement in the retail sector is an article which appeared in the Australian on 14 January 2014 titled: “Retailers urged to try their luck abroad as foreign influx builds” which mentions that the relative strength of Australian economy meant foreign retailers were continuing to target Australian consumers – Uniqlo and H&M to join Zara, Gap and Topshop in opening in Australia this year with Next and River Island selling online to Australians. The article goes on to say that the proximity to emerging retail markets in Asia is pressuring Australian retailers to exploit outbound opportunities and with the right strategy, local retailers are well placed to take advantage of consumer spending growth occurring in several Asian markets – it is expected more Australian retailers will seek growth opportunities in Asia (Premier Retail has expanded into Singapore and will expand into Britain this year).
The recents falls in the Australian $ from the heights of $1.06 against the $USD may also help the recovery of the local tourism market as foreigners return to our shores and Australians elect to visit our country now that some of the luster of a cheap overseas holiday fades.
Adrian Hunter 