Download The Non-Mining Economic Recovey

The Non-Mining
Economic Recovery
Dr David Gruen
Australian Treasury
ABE Annual Conference
21 November 2013
Real GDP growth
3.5
2013
Per cent
Comparison of forecasts
Per cent 3.5
4.0
3.0
3.5
3.0
2014
Per cent
Per cent 4.0
3.5
Budget
Budget
PEFO
2.5
2.5
3.0
3.0
PEFO
2.0
2.0
2.5
2.5
1.5
1.5
2.0
2.0
1.0
1.0
1.5
1.5
Mean of Consensus forecasts
Range of Consensus forecasts
Mean of Consensus forecasts
Range of Consensus forecasts
0.5
0.5
0.0
Jan-13
Apr-13
Jul-13
Source: Consensus Economics and Treasury.
0.0
Oct-13
1.0
0.5
Jan-13
1.0
Apr-13
Jul-13
0.5
Oct-13
Real Exchange Rate and Terms of Trade
180
Index (Post float average = 100)
Index (Post float average = 100)
180
170
170
160
160
Terms of Trade
150
150
140
140
130
130
120
120
110
110
Real exchange rate
100
100
90
90
80
80
70
Mar-84
Jun-87
Sep-90
Dec-93
Source: ABS Cat. No. 5206.0, RBA and Treasury.
Mar-97
Jun-00
Sep-03
Dec-06
Mar-10
70
Jun-13
Business lending rates
12
Per cent
Per cent
12
Small business
10
10
15-yr average
8
8
15-yr average
6
6
Large business
4
Jun-98
Jun-01
Source: RBA.
Jun-04
Jun-07
Jun-10
4
Jun-13
Capital expenditure
Mining
140
120
$billion
Non-mining
$billion
Upper and lower
error bounds
140
140
120
120
$billion
$billion
140
120
Upper and lower
error bounds
100
100
100
80
80
80
80
60
60
60
60
40
40
40
40
20
20
20
20
0
0
0
0
2005-06 2007-08 2009-10 2011-12 2013-14
2005-06 2007-08 2009-10 2011-12 2013-14
Note: Estimates of CAPEX are adjusted using realisation ratios. The chosen realisation ratios minimise the forecasting error.
The upper and lower error bounds are based on the historic forecasting errors for the selected realisation ratios.
Source: ABS Catalogue Number 5625.0 and Treasury.
100
Resource investment – major projects
75
$billion
$billion
75
60
60
45
45
30
30
15
15
0
0
2010-11
2012-13
LNG
Source: Treasury.
Iron ore
2014-15
Coal
Other
2016-17
Committed
Resource exports
Average annual percentage contribution to real GDP growth
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
-0.5
2005-06 to 2008-09
Iron ore
Source: Treasury.
2009-10 to 2012-13
Coal
LNG
2013-14 to 2014-15
Other
2015-16 to 2016-17
Resources exports
Contributions to real GDP growth
4
Percentage points
Percentage points
Forecasts
4
Projections
GDP growth
3
3
Non-resources
sectors
2
2
Resources sector
1
1
0
0
Net resources investment
-1
-1
Resources exports
-2
-2
2011-12
2012-13
2013-14
2014-15
2015-16
Note: Assumes that mining investment has an import share of 50 per cent. Forecasts and projections are from PEFO.
Source: ABS cat. no. 5204.0 and 5302.0, BREE and Treasury.
2016-17
Labour market
66.0
Per cent
Per cent
6.0
Unemployment rate (RHS)
65.5
5.0
Participation rate (LHS)
65.0
64.5
Oct-08
4.0
Oct-09
Source: ABS Cat. No. 6202.0.
Oct-10
Oct-11
Oct-12
3.0
Oct-13
Capacity utilisation by sector
10
Per cent difference from long-run average
Per cent difference from long-run average
10
8
8
6
6
4
Mining
2
4
2
Non-mining
0
0
-2
-2
-4
-4
-6
-6
-8
Sep-01
Sep-04
SOURCE: NAB, Quarterly business survey, September quarter 2013.
Sep-07
Sep-10
-8
Sep-13
Dwelling investment response to
easing cycles
170
Index
Index
160
170
160
largest response
(2001-02)
150
150
140
140
130
130
120
120
2011-13
110
110
100
100
smallest response
(2008-09)
90
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
Quarters (Quarter 0 = quarter prior to first rate cut)
Source: ABS cat. no. 5206.0, RBA and Treasury.
10
11
12
13
90
14
15
House price to income ratio
4.5
Ratio
Ratio
4.5
4.0
4.0
3.5
3.5
3.0
3.0
2.5
Sep-93
Sep-97
Sep-01
Sep-05
Sep-09
2.5
Sep-13
Note: Ratio of median house prices to average household gross disposable income; income is before the deduction of dwelling interest
payments; excludes income of unincorporated enterprises.
Source: ABS, HIA, RP Data - Rismark and Treasury.
Consumption
and investment
85
Per cent of GDP
Per cent of GDP
80
30
25
Total Investment (RHS)
75
20
Total Consumption (LHS)
70
65
Jun-83
15
Jun-89
Jun-95
Jun-01
Jun-07
Note: Total consumption includes both general government and household final consumption expenditure
Total investment includes total private investment (including ownership of dwellings) and total public investment
Source: ABS Catalogue Number 5206.0.
10
Jun-13
Short-term visitor arrivals:
source countries (rolling annual sum)
1.2
Persons (millions)
Persons (millions)
1
1.2
1
0.8
0.8
NZ
0.6
0.6
UK
Japan
0.4
0.4
US
0.2
0.2
China
0
Sep-92
Sep-95
Sep-98
Source: ABS Catalogue Number 3401.0.
Sep-01
Sep-04
Sep-07
Sep-10
0
Sep-13
Contributions to annual income growth
4
Percentage points contribution, annual average
Percentage points contribution, annual average
4
3
3
2
2
1
1
0
0
-1
-1
1960s
Net foreign income
1970s
1980s
Labour productivity
1990s
Labour utilisation
2000s to 2013
Terms of trade
Decade to 2023
GNI per person
Note: Long-run average annual labour productivity growth and a zero contribution from changes in net foreign income are assumed
over the decade to 2023.
Source: ABS Cat. No. 5204.0, 5206.0 and Treasury calculations.