There is a long list of worries that you may hear about our economy:
- The solid contribution to growth from housing construction seen over 2013-16 has faded and building approvals are off their highs.
- Average house prices have started to edge down, with fears of a deeper crash.
- The outlook for consumer spending is constrained and uncertain
- Wages growth is at record lows
- Underemployment is high.
- Consumers have been running down their savings rate (to now just 2.7%),
- Mining investment is still falling with investment plans pointing to roughly 15% falls this financial year and next.
- The Australian dollar at around $US0.78 risks threatening growth in trade-exposed sectors like tourism, agriculture and manufacturing.
- Underlying inflation is too low.
Yes, these are all a drag on the economy. But how much do they really matter? And what are the implications for your investments?
In this piece, we look at what matters most for the Australian economy and wrap up with a view on implications for investment outcomes.