Economic Update. 15 Oct 2015

Transcription

1 Economic Update 15 Oct 2015

2 Welcome: Our Presenters Warren Hogan, Chief Economist, Ai Group Julie Toth, Chief Economist, Ai Group Tony Melville, Head of Communications, Ai Group

3 Housekeeping Questions via the chat box at anytime Bottom left hand corner Technical Support The number is in your technical chat box A copy of the presentation will be available in 5 business days

4 Want more information or a quick update? Stay up to date with Ai Group Economics Australian PMI, PSI and PCI (monthly) Ai Group Economics Weekly (weekly every Friday) Ai Group Economics Factsheets on inflation, wage trends and other topics (regular) Australian Construction Outlook (twice per year) Australian CEOs Business Prospects (annual, Feb) World Economic Forum (WEF) Global Competitiveness Index (annual, Sep) Free web downloads and direct service for Federal and State Gov Budget updates for business Ai Group members at:

5 Warren Hogan

6 ANZ Economic Outlook Global, Asia, Australia: The Bumpy Road Ahead Warren Hogan Chief Economist 15 October 2015

7 forecasts ppt Contribution Global growth remains sub-trend and momentum is waning. Emerging world is slowing while developed economies growth is good Global growth forecasts US Other Developed China Other Emerging 16 Source: Bloomberg, Thompson Reuters Datastream, Markit, ANZ Research 2

8 Global trade is weak having fallen below the levels of a year ago in the past three months. Global trade Source: Bloomberg, Markit, ANZ Research 8

9 Index Global PMIs highlight the divergence between goods and services industries and can explain some of the weakness in world trade. Is this cyclical or secular? Global PMI Manufacturing vs Services Manufacturing Services Source: Bloomberg, Markit, ANZ Research 9

10 GDP 5 Global growth forecasts average average f ANZ 2016f 2017f IMF 2015f 2016f Consensus (BBG) 2015f 2016f 2017f United States Euro area United Kingdom Japan China Korea Taiwan Indonesia Thailand Hong Kong Malaysia Singapore Philippines Vietnam East Asia ex-japan India Australia New Zealand Emerging Developed World

11 % % forecasts forecasts forecasts % % forecasts Regional GDP growth forecasts Developed GDP vs long-term average Emerging GDP vs long-term average Developed Emerging Emerging East Asia GDP vs long-term average South Asia GDP vs long-term average East Asia ex Japan Source: Bloomberg, IMF, ANZ Research South Asia

12 Portfolio flows to emerging markets Source: IIF, ANZ Research 7

13 % y/y % % Index The US growth outlook is positive and the unemployment rate is close to the Fed s view of full employment. Global factors are weighing on inflation GDP growth 70 ISM manuf. vs ISM services q/q annualised 12 y/y forecasts ISM non manuf ISM manuf. Unemployment rate Core inflation measures Fed estimate of "NAIRU "5.0% to 5.2% Weighted median Core PCE Core CPI Source: Bloomberg, BLS, BEA, Thompson Reuters Datastream, ANZ 8

14 y/y % change Index % change Index, demand for credit y/y % change Although euro area growth eased a touch in Q2, growth appears to be becoming more entrenched and the drivers are broadening. Inflation pressures remain subdued GDP GDP and Credit demand y/y q/q Household and corporate demand, lhs GDP, rhs 4 Inflation measures Manufacturing PMIs by country Economic activity expanding Core CPI CPI ex-energy Headline CPI 36 Economic activity contracting Euro area Germany France Spain Source: Bloomberg, ECB, Eurostat, Markit, ANZ Research 9

15 Year-average % change Economic growth in China is slowing as the period of hyperindustrialisation comes to an end China output growth GDP growth LT average Source: Bloomberg, ANZ Research 10

16 millio n China employment structure is a good indicator of how much industrial change lies ahead of them % of Chinese workers are employed in service industries. It is about 80% in the US and Australia Primary industry Secondary industry Tertiary industry Source: CEIC, ANZ Research 11

17 market share million tonnes Steel production appears to have peaked in China is now a major steel exporter World steel production 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% China World (ex China) China's market share Source: Bloomberg, ANZ Research 12

18 % of GDP China needs to address debt issues through raising equity in the corporate sector SOE reform is critical. Outstanding debt, % of GDP China's fiscal expansion via its banking system China - outstanding borrowing by households and businesses, % GDP Source: CEIC, Bloomberg, ANZ Research 13

19 % of GDP China Debt in economy China Debt in economy Local government Central government Household Corporate Source: CEIC, IMF, ANZ Research 14

20 China s consumer is an unusually small proportion of the economy China s private consumption is about half of the US consumer market, 2014 Note: For international comparison, the size of consumption is valued in PPP terms. Nominally, China s household consumption totalled USD3.8trn in 2014, almost as large as Germany s GDP. Source: World Bank, IMF, OECD, ANZ Research 15

21 This is unique in terms of other Asian economies and other emerging economies Per capita income and consumption (as a % of GDP) Source: IMF, ANZ Research 16

22 China s consumer market will provide the demand on which the new industries will develop and drive the Great Transition GDP and consumption growth in China Source: CEIC, ANZ Research 17

23 $m per quarter, chain volume Resources investment has a long way to fall. This has yet to fully weigh on employment and, more importantly, household income/spending Resources investment and employment s Sources: ABS, ANZ Research Resources investment (LHS) Resources employment, Labour Force Survey (RHS) 18

24 Dwelling investment, $ billion (real $ ) Residential construction has been a critical source of economic activity since the peak in the mining investment cycle Dwelling investment fore cast s New dwellings (Seas Adj) New dwellings (Trend) Alterations & additions (Seas Adj) Alterations & additions (Trend) Source: ABS, Property Council of Australia, Residex, ANZ Research 19

25 Net balance The residential housing cycle is nearing a peak. This will impact both jobs and construction as well as prices and the wealth effect. Residential construction and industry expectations Number ('000s) ANZ-Property Council housing construction outlook (12 months forward) ABS new dwelling approvals (RHS) ABS new dwelling commencements (RHS) 31 Sources: ABS, PCA, ANZ Research 20

26 y/y % change Signs that auction markets are cooling 16 Home prices and auction clearance rates 86% 12 78% % 62% 54% % of total auction results, sa -4 46% House prices: capital city weighted average (lhs) Auction clearance rate: capital city weighted average (forward 3 mths, rhs) 38% Sources: CoreLogic, RPData, ANZ Research 21

27 % change y/y, ppts contribution to growth A strong uplift in investment outside of mining and construction looks unlikely Investment intentions for by industry % change y/y ppts contribution to growth Source: ABS, Datastream, NAB, ANZ Research 22

28 Why poor capex outlook? Australian firms use effective discount rates that are high (in this low yield environment) Hurdle rates for investment decisions, 2014 Source: Deloitte, RBA, ANZ Research 23

29 The ANZ Research Stateometer. Divergent trends are continuing right through the winter months The ANZ Stateometer Sources: ANZ Research 24

30 Percentage points forecasts Growth support from the AUD will wane 1.5 Net services trade and the currency y/y % change Net services trade, contribution to y/y GDP growth (LHS) AUD trade weighted index (RHS) Sources: ABS, RBA, ANZ Research 30

31 RBA to cut in More cuts are needed to eat into unemployment RBA cash rate and the unemployment rate Sources: ABS, RBA, ANZ Research 31

32 Turnbull s ascension to the Prime Ministership led to an immediate bounce for the Coalition in the polls Newspoll Source: Newspoll, ANZ Research 27

33 Disclaimer The distribution of this document or streaming of this video broadcast (as applicable, publication ) may be restricted by law in certain jurisdictions. Persons who receive this publication must inform themselves about and observe all relevant restrictions. Disclaimer for all jurisdictions, where content is authored by ANZ Research: Except if otherwise specified below, this publication is issued and distributed in your country/region by Australia and New Zealand Banking Group Limited (ABN ) ( ANZ ), on the basis that it is only for the information of the specified recipient or permitted user of the relevant website (collectively, recipient ). This publication may not be reproduced, distributed or published by any recipient for any purpose. It is general information and has been prepared without taking into account the objectives, financial situation or needs of any person. Nothing in this publication is intended to be an offer to sell, or a solicitation of an offer to buy, any product, instrument or investment, to effect any transaction or to conclude any legal act of any kind. If, despite the foregoing, any services or products referred to in this publication are deemed to be offered in the jurisdiction in which this publication is received or accessed, no such service or product is intended for nor available to persons resident in that jurisdiction if it would be contradictory to local law or regulation. Such local laws, regulations and other limitations always apply with non-exclusive jurisdiction of local courts. Certain financial products may be subject to mandatory clearing, regulatory reporting and/or other related obligations. These obligations may vary by jurisdiction and be subject to frequent amendment. Before making an investment decision, recipients should seek independent financial, legal, tax and other relevant advice having regard to their particular circumstances. The views and recommendations expressed in this publication are the author s. They are based on information known by the author and on sources which the author believes to be reliable, but may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise: they are current on the date of this publication and are subject to change without notice; and, all price information is indicative only. Any of the views and recommendations which comprise estimates, forecasts or other projections, are subject to significant uncertainties and contingencies that cannot reasonably be anticipated. On this basis, such views and recommendations may not always be achieved or prove to be correct. Indications of past performance in this publication will not necessarily be repeated in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Additionally, this publication may contain forward looking statements. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward looking statements. All investments entail a risk and may result in both profits and losses. Foreign currency rates of exchange may adversely affect the value, price or income of any products or services described in this publication. The products and services described in this publication are not suitable for all investors, and transacting in these products or services may be considered risky. ANZ and its related bodies corporate and affiliates, and the officers, employees, contractors and agents of each of them (including the author) ( Affiliates ), do not make any representation as to the accuracy, completeness or currency of the views or recommendations expressed in this publication. Neither ANZ nor its Affiliates accept any responsibility to inform you of any matter that subsequently comes to their notice, which may affect the accuracy, completeness or currency of the information in this publication. Except as required by law, and only to the extent so required: neither ANZ nor its Affiliates warrant or guarantee the performance of any of the products or services described in this publication or any return on any associated investment; and, ANZ and its Affiliates expressly disclaim any responsibility and shall not be liable for any loss, damage, claim, liability, proceedings, cost or expense ( Liability ) arising directly or indirectly and whether in tort (including negligence), contract, equity or otherwise out of or in connection with this publication. If this publication has been distributed by electronic transmission, such as , then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. ANZ and its Affiliates do not accept any Liability as a result of electronic transmission of this publication. ANZ and its Affiliates may have an interest in the subject matter of this publication as follows: They may receive fees from customers for dealing in the products or services described in this publication, and their staff and introducers of business may share in such fees or receive a bonus that may be influenced by total sales. They or their customers may have or have had interests or long or short positions in the products or services described in this publication, and may at any time make purchases and/or sales in them as principal or agent. They may act or have acted as market-maker in products described in this publication. ANZ and its Affiliates may rely on information barriers and other arrangements to control the flow of information contained in one or more business areas within ANZ or within its Affiliates into other business areas of ANZ or of its Affiliates. Please contact your ANZ point of contact with any questions about this publication including for further information on these disclosures of interest. Country/region specific information: Australia. This publication is distributed in Australia by ANZ. ANZ holds an Australian Financial Services licence no A copy of ANZ's Financial Services Guide is available at and is available upon request from your ANZ point of contact. If trading strategies or recommendations are included in this publication, they are solely for the information of wholesale clients (as defined in section 761G of the Corporations Act 2001 Cth). Persons who receive this publication must inform themselves about and observe all relevant restrictions. Brazil. This publication is distributed in Brazil by ANZ on a cross border basis and only following request by the recipient. No securities are being offered or sold in Brazil under this publication, and no securities have been and will not be registered with the Securities Commission - CVM. Brunei. Japan. Kuwait. Malaysia. Switzerland. Taiwan. This publication is distributed in each of Brunei, Japan, Kuwait, Malaysia, Switzerland and Taiwan by ANZ on a cross-border basis. Cambodia. APS222 Disclosure. The recipient acknowledges that although ANZ Royal Bank (Cambodia) Ltd. is a subsidiary of ANZ, it is a separate entity to ANZ and the obligations of ANZ Royal Bank (Cambodia) Ltd. do not constitute deposits or other liabilities of ANZ and ANZ is not required to meet the obligations of ANZ Royal Bank (Cambodia) Ltd. European Economic Area ( EEA ): United Kingdom. ANZ in the United Kingdom is authorised by the Prudential Regulation Authority ( PRA ). Subject to regulation by the Financial Conduct Authority ( FCA ) and limited regulation by the PRA. Details about the extent of our regulation by the PRA are available from us on request. This publication is distributed in the United Kingdom by ANZ solely for the information of persons who would come within the FCA definition of eligible counterparty or professional client. It is not intended for and must not be distributed to any person who would come within the FCA definition of retail client. Nothing here excludes or restricts any duty or liability to a customer which ANZ may have under the UK Financial Services and Markets Act 2000 or under the regulatory system as defined in the Rules of the PRA and the FCA. Germany. This publication is distributed in Germany by the Frankfurt Branch of ANZ solely for the information of its clients. Other EEA countries. This publication is distributed in the EEA by ANZ Bank (Europe) Limited ( ANZBEL ) which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, to persons who would come within the FCA definition of eligible counterparty or professional client in other countries in the EEA. This publication is distributed in those countries solely for the information of such persons upon their request. It is not intended for, and must not be distributed to, any person in those countries who would come within the FCA definition of retail client. Fiji. For Fiji regulatory purposes, this publication and any views and recommendations are not to be deemed as investment advice. Fiji investors must seek licensed professional advice should they wish to make any investment in relation to this publication. Hong Kong. This publication is distributed in Hong Kong by the Hong Kong branch of ANZ, which is registered at the Hong Kong Monetary Authority to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities. The contents of this publication have not been reviewed by any regulatory authority in Hong Kong. If in doubt about the contents of this publication, you should obtain independent professional advice.

34 Disclaimer The distribution of this document or streaming of this video broadcast (as applicable, publication ) may be restricted by law in certain jurisdictions. Persons who receive this publication must inform themselves about and observe all relevant restrictions. Disclaimer for all jurisdictions, where content is authored by ANZ Research: Except if otherwise specified below, this publication is issued and distributed in your country/region by Australia and New Zealand Banking Group Limited (ABN ) ( ANZ ), on the basis that it is only for the information of the specified recipient or permitted user of the relevant website (collectively, recipient ). This publication may not be reproduced, distributed or published by any recipient for any purpose. It is general information and has been prepared without taking into account the objectives, financial situation or needs of any person. Nothing in this publication is intended to be an offer to sell, or a solicitation of an offer to buy, any product, instrument or investment, to effect any transaction or to conclude any legal act of any kind. If, despite the foregoing, any services or products referred to in this publication are deemed to be offered in the jurisdiction in which this publication is received or accessed, no such service or product is intended for nor available to persons resident in that jurisdiction if it would be contradictory to local law or regulation. Such local laws, regulations and other limitations always apply with non-exclusive jurisdiction of local courts. Certain financial products may be subject to mandatory clearing, regulatory reporting and/or other related obligations. These obligations may vary by jurisdiction and be subject to frequent amendment. Before making an investment decision, recipients should seek independent financial, legal, tax and other relevant advice having regard to their particular circumstances. The views and recommendations expressed in this publication are the author s. They are based on information known by the author and on sources which the author believes to be reliable, but may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise: they are current on the date of this publication and are subject to change without notice; and, all price information is indicative only. Any of the views and recommendations which comprise estimates, forecasts or other projections, are subject to significant uncertainties and contingencies that cannot reasonably be anticipated. On this basis, such views and recommendations may not always be achieved or prove to be correct. Indications of past performance in this publication will not necessarily be repeated in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Additionally, this publication may contain forward looking statements. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward looking statements. All investments entail a risk and may result in both profits and losses. Foreign currency rates of exchange may adversely affect the value, price or income of any products or services described in this publication. The products and services described in this publication are not suitable for all investors, and transacting in these products or services may be considered risky. ANZ and its related bodies corporate and affiliates, and the officers, employees, contractors and agents of each of them (including the author) ( Affiliates ), do not make any representation as to the accuracy, completeness or currency of the views or recommendations expressed in this publication. Neither ANZ nor its Affiliates accept any responsibility to inform you of any matter that subsequently comes to their notice, which may affect the accuracy, completeness or currency of the information in this publication. Except as required by law, and only to the extent so required: neither ANZ nor its Affiliates warrant or guarantee the performance of any of the products or services described in this publication or any return on any associated investment; and, ANZ and its Affiliates expressly disclaim any responsibility and shall not be liable for any loss, damage, claim, liability, proceedings, cost or expense ( Liability ) arising directly or indirectly and whether in tort (including negligence), contract, equity or otherwise out of or in connection with this publication. If this publication has been distributed by electronic transmission, such as , then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. ANZ and its Affiliates do not accept any Liability as a result of electronic transmission of this publication. ANZ and its Affiliates may have an interest in the subject matter of this publication as follows: They may receive fees from customers for dealing in the products or services described in this publication, and their staff and introducers of business may share in such fees or receive a bonus that may be influenced by total sales. They or their customers may have or have had interests or long or short positions in the products or services described in this publication, and may at any time make purchases and/or sales in them as principal or agent. They may act or have acted as market-maker in products described in this publication. ANZ and its Affiliates may rely on information barriers and other arrangements to control the flow of information contained in one or more business areas within ANZ or within its Affiliates into other business areas of ANZ or of its Affiliates. Please contact your ANZ point of contact with any questions about this publication including for further information on these disclosures of interest. Country/region specific information: Australia. This publication is distributed in Australia by ANZ. ANZ holds an Australian Financial Services licence no A copy of ANZ's Financial Services Guide is available at and is available upon request from your ANZ point of contact. If trading strategies or recommendations are included in this publication, they are solely for the information of wholesale clients (as defined in section 761G of the Corporations Act 2001 Cth). Persons who receive this publication must inform themselves about and observe all relevant restrictions. Brazil. This publication is distributed in Brazil by ANZ on a cross border basis and only following request by the recipient. No securities are being offered or sold in Brazil under this publication, and no securities have been and will not be registered with the Securities Commission - CVM. Brunei. Japan. Kuwait. Malaysia. Switzerland. Taiwan. This publication is distributed in each of Brunei, Japan, Kuwait, Malaysia, Switzerland and Taiwan by ANZ on a crossborder basis. Cambodia. APS222 Disclosure. The recipient acknowledges that although ANZ Royal Bank (Cambodia) Ltd. is a subsidiary of ANZ, it is a separate entity to ANZ and the obligations of ANZ Royal Bank (Cambodia) Ltd. do not constitute deposits or other liabilities of ANZ and ANZ is not required to meet the obligations of ANZ Royal Bank (Cambodia) Ltd. European Economic Area ( EEA ): United Kingdom. ANZ in the United Kingdom is authorised by the Prudential Regulation Authority ( PRA ). Subject to regulation by the Financial Conduct Authority ( FCA ) and limited regulation by the PRA. Details about the extent of our regulation by the PRA are available from us on request. This publication is distributed in the United Kingdom by ANZ solely for the information of persons who would come within the FCA definition of eligible counterparty or professional client. It is not intended for and must not be distributed to any person who would come within the FCA definition of retail client. Nothing here excludes or restricts any duty or liability to a customer which ANZ may have under the UK Financial Services and Markets Act 2000 or under the regulatory system as defined in the Rules of the PRA and the FCA. Germany. This publication is distributed in Germany by the Frankfurt Branch of ANZ solely for the information of its clients. Other EEA countries. This publication is distributed in the EEA by ANZ Bank (Europe) Limited ( ANZBEL ) which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, to persons who would come within the FCA definition of eligible counterparty or professional client in other countries in the EEA. This publication is distributed in those countries solely for the information of such persons upon their request. It is not intended for, and must not be distributed to, any person in those countries who would come within the FCA definition of retail client. Fiji. For Fiji regulatory purposes, this publication and any views and recommendations are not to be deemed as investment advice. Fiji investors must seek licensed professional advice should they wish to make any investment in relation to this publication. Hong Kong. This publication is distributed in Hong Kong by the Hong Kong branch of ANZ, which is registered at the Hong Kong Monetary Authority to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities. The contents of this publication have not been reviewed by any regulatory authority in Hong Kong. If in doubt about the contents of this publication, you should obtain independent professional advice.

35 Julie Toth

36 Economic Update 15 Oct 2015 The Australian Economy: the dollar and other challenges in 2016 Julie Toth Chief Economist

37 GDP growth in Q was 2.0% p.a. slower than this decade s average and slower than past decades Australian GDP growth to Jun 2015, % p.a. Source: ABS National Accounts

38 What is growing? mining, finance, health, education. Some parts of manufacturing recovering as dollar drops Real value added output: industry size ($bn) growth rates Source: ABS National Accounts

39 Better start to : Ai Group indexes show services, house building & parts of manufacturing improving Australian PMI, Australian PSI, Australian PCI Sources: Ai Group

40 What level of AUD is good for business? 2/3 of manufacturers can survive US$0.90. Sub-$0.80 is better AUD tolerance: manufacturing businesses that can remain competitive at each AUD/USD trading range, (cumulative per cent of businesses), 2013 to 2015* Trading range for AUD/USD: Competitive in export markets Competitive against imports Source: Ai Group, CEO Survey: Business Prospects. 2015

41 Benefits of lower dollar: recovery in export volumes for services and some types of manufactured goods Australian export volumes per qtr, to Q Source: ABS

42 Low dollar for services: tourism and education exports (more visitors spending) are rising rapidly & strongly Australian export earnings, net tourism and education related services Source: ABS and ANZ

43 Low dollar for services: import replacement is a crucial response. e.g. holiday departures still high but falling Short-term holiday visitor arrivals and resident departures, to Aug 2015 Sources: ABS

44 Low dollar for manufacturing: recovery in goods exports (e.g. food, pharma, health products, equipment) AUD Trade Weighted Index and the Australian PMI exports sub-index Sources: RBA and Ai Group

45 Low dollar for manufacturing: food exports up strongly, other sectors exports recovering or steady Manufactured goods exports by sector, annual value Sources: ABS

46 Australia s economy in 2016 Dollar is lower! But what else needs to happen? Jobs, incomes, investment What are our national strengths and weaknesses? What can businesses do to build their competitiveness? What should policy-makers do to build our competitiveness?

47 Where to in 2016? Employment growth better lately, but unemployment rate seems to be stuck above 6% Australian employment, labour force and unemployment rate (trend) Source: ABS, Labour Force Australia, to Aug 2015.

48 Where to in 2016? Mixed messages about the labour market: more job ads but also stubborn unemployment National unemployment rate and ANZ job ads ratio Source: ANZ and ABS

49 Where to in 2016? If Australian population growth is slower, then our potential GDP growth is slower too Estimated resident population, annual growth (to Dec 2014) Source: ABS

50 Where to in 2016? Nationally, our falling real income per capita is limiting growth in local spending & investment Source: ABS

51 Where to in 2016? Lower profits for miners and other sectors reduces their ability and incentive to invest Corporations gross operating profits (nominal), by major sector Source: ABS

52 Investing for growth? Business intentions suggest 30% less on buildings in , 18% less on equipment Private business capital investment (CAPEX), annual value Source: ABS

53 Australia s global competitiveness ranking improved to 21 st place in , up one place from last year Australian rankings in WEF Global Competitiveness Report BEST INDICATORS (strengths) rank WORST INDICATORS (weaknesses) rank Financial markets 7 Labour market efficiency 36 Higher education 8 Goods market efficiency 27 Primary education 9 Business sophistication 27 Population health 9 Innovation 23 Infrastructure 16 Market size 22 Institutions 19 Technological readiness 21 Source: WEF

54 Australia s global competitiveness rankings suggest the labour market & tax are currently our weakest spots Australia s most problematic factors for doing business, Source: WEF

55 Australia s labour market rankings suggest we need to focus on cooperation & flexibility as much as cost Australia s labour market rankings, Source: WEF

56 The global leaders show we need to focus on innovation, connections, agility, to build on our basics GCI Rank, Global competitiveness leaders, Country (GCI rank in ) Basic requirements* Efficiency enhancers# 1 Switzerland (1) Singapore (2) United States (3) Germany (5) Netherlands (8) Japan (6) Hong Kong (7) Finland (4) Sweden (10) United Kingdom (9) Innovation and sophistication** * The basic requirements group of indicators are about institutions, infrastructure, macroeconomic environment, health, primary education. # The efficiency enhancers group of indicators are about higher education, training, goods market efficiency, labour market efficiency, financial market development, technological readiness and market size. ** The innovation and sophistication group of indicators are about business sophistication and innovation. Source: WEF

57 Want more information or a quick update? Stay up to date with Ai Group Economics Australian PMI, PSI and PCI (monthly) Ai Group Economics Weekly (weekly every Friday) Ai Group Economics Factsheets on inflation, wage trends and other topics (regular) Australian Construction Outlook (twice per year) Australian CEOs Business Prospects (annual, Feb) World Economic Forum (WEF) Global Competitiveness Index (annual, Sep) Free web downloads and direct service for Federal and State Gov Budget updates for business Ai Group members at:

58 Questions

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