Home > Growth, Trade > Aussies still looking at strong export sector

Aussies still looking at strong export sector

December 18, 2013 Leave a comment Go to comments

The graph from National Australia Bank below shows the components of Australian GDP from 2007-2013 with forecasts for 2014 and 2015. GDP consists of C+I+G+(X-M) so from the graph you can see that:

C = Private Consumption
I = Business Investment
G = Government Demand
(X-M) = Net Exports

* There is anticipated an increase in non-mining investment with investment in the mining sector slowing down as completion nears.
* An increase in private consumption as well as net exports holding its own.
* The relationship between business investment and the increase in net exports
* Pace of growth is below the trend over 2014-2015 which means that that population growth will be greater than the number of new jobs created.

Aussie Resource

Categories: Growth, Trade Tags: , ,
  1. Simon
    December 21, 2013 at 4:23 pm

    Growth in government demand should be used to offset drops in business investment. It looks like that did not occur in 2013. Australia should be transitioning its business investment strategy away from hard commodities and into soft commodities. The great China build out is more or less over and it looks like the contraction in business investment in 2013 and 2014 reflects a pretty good understanding of this. Growth in soft commodity demand in my opinion is likely to be at the beginning of a very long growth phase as policy makers figure out how to stimulate demand from households in China and elsewhere.

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