The Chinese call 2019, the year of the pig. The pig to the Chinese represents luck, good fortune, wealth, honesty and prosperity.
However for Australia it seems like 2019 is the year of the sloth, a year to “pause, rest and reflect”. Everyone is doing it !
The chief executive officers of our largest banks are doing it, after a horrific Royal Commission. Home owners are doing it, after significant falls in the price of houses and apartments across the nation. Consumers are doing it, after limited wage increases in the past decade. Farmers are doing it, after months and months without rain (or too much rain). Voters are doing it, as they consider the deficit and the May 18 election. The Reserve Bank is doing it, after watching Brexit fails, US trade wars and China slowing. Businesses are doing it, after they have been watching everyone else doing it.
And the economy, with everyone pausing, resting and reflecting, is doing what it always does in these conditions… it is SLOWING.
Yet, the Reserve Bank in its latest bulletin tells us “the labour market had continued to improve in early 2019, despite the slowing in growth…with an unemployment rate at or around 5%”. Undoubtedly, there has been a mild easing in the number of job advertisements. HOWEVER job vacancies reported by most employers have increased, which suggests stronger conditions in the coming months, particularly while official interest rates remain at 1.5% and inflation hovers at around a low of 1.8-2.0%. In addition, while business conditions have declined from the high points of 2018 they still remain around levels consistent with long term trends in growth.
Elections, global trade tensions and European political issues, come and go, and will probably remain sources of uncertainty for the next twelve months. Ultimately, governments and economic conditions will constantly change, but business must ensure they are diligent and cautious, carefully looking after their own financial affairs and navigating safely through the conditions, so they can innovate, prosper and grow. The future is still bright!
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