Deloitte: Business Outlook Remembers Recession Free Stretch

By Rob Starr, Content Manager, Big4.com

Australia remains a global standout – a long stretch without a recession and growth a multiple of many other rich nations. Releasing Deloitte Access Economics’ June 2012 quarter Business Outlook, Access’s Chris Richardson noted July 1 marked a milestone for Australia—21 years without an economic downturn.

“A striking investment boom continues to do all the heavy lifting on our growth. And there’s more where that came from,” he said.  “Yet the peak of the project pipeline is already in sight, meaning the key prop to the faster part of Australia’s two speed economy is looking less certain the further out you look – though there’s still enough gas in the tank of huge resource projects to provide handy pipeline protection if Europe and China were to turn pear-shaped.”

Much does still hinge on Europe and China, and provided neither generates worse news than already expected (an admittedly key caveat), then we’d stick to the view we’ve had for a while: that the overall outlook for Australian growth is still looking rather better than most people realise.”

Richardson said two speed troubles were keeping inflation low, aided by related moderation in wage gains and the $A’s stellar strength. He noted that even productivity was showing some signs of life and oil prices have dropped back, while carbon pricing is likely to be just a one off boost to prices.