- Inflation is high on a global basis with some countries posting levels in the range of 7-10% while Australia is at 6.1%.
- The rate of unemployment, 3.5% in Australia, is also low in other similar advanced economies.
- Strong levels of demand which are not being met with the constraints facing businesses in regard to supply are seen as the major contributors.
- The invasion of Ukraine has led to rising energy costs globally and some food price increases.
- Interest rates globally have increased faster than anticipated as a result of soaring inflation.
- Economic growth is expected to slow as household spending levels ease.
- Global economic growth figures were recently downgraded by the official body. This includes impacts for Australia.
- Australian inflation forecast to peak around 7.75% late-2022 before dropping to around 4% in 2023 and further to 3% in 2024.
- Prices for gas and electricity could see a 10-15% increase in late-2022.
- Unemployment has dropped at a faster rate than had been expected. RBA business surveys indicate that many enterprises are intending to take on new labour but are confronted with issues in this regard due to the current low unemployment. The rate of unemployment, 3.5%, is forecast to fall further prior to increasing as economic growth slows.
- The Fair Work Commission minimum wage decision fwc.gov.au has resulted in increased wages bills in some instances. Inflationary pressures and the tight market for labour are also contributing in part to increased labour costs.
- Uncertainty around household spending behaviour is a key point of uncertainty for the RBA.
- The RBA notes a lot of work in the construction pipeline, especially in the residential sector. However, operators are once again facing constraints due to the labour situation, supply chain disruptions and weather disruptions in some regions.
- As one of the country’s major trade partners, China is a cause of concern. Specifically the way it has addressed the recent pandemic outbreak with shutdowns.
Economic Outlook Provides Intel for Business Finance Planning
- Inflation is high on a global basis with some countries posting levels in the range of 7-10% while Australia is at 6.1%.
- The rate of unemployment, 3.5% in Australia, is also low in other similar advanced economies.
- Strong levels of demand which are not being met with the constraints facing businesses in regard to supply are seen as the major contributors.
- The invasion of Ukraine has led to rising energy costs globally and some food price increases.
- Interest rates globally have increased faster than anticipated as a result of soaring inflation.
- Economic growth is expected to slow as household spending levels ease.
- Global economic growth figures were recently downgraded by the official body. This includes impacts for Australia.
- Australian inflation forecast to peak around 7.75% late-2022 before dropping to around 4% in 2023 and further to 3% in 2024.
- Prices for gas and electricity could see a 10-15% increase in late-2022.
- Unemployment has dropped at a faster rate than had been expected. RBA business surveys indicate that many enterprises are intending to take on new labour but are confronted with issues in this regard due to the current low unemployment. The rate of unemployment, 3.5%, is forecast to fall further prior to increasing as economic growth slows.
- The Fair Work Commission minimum wage decision fwc.gov.au has resulted in increased wages bills in some instances. Inflationary pressures and the tight market for labour are also contributing in part to increased labour costs.
- Uncertainty around household spending behaviour is a key point of uncertainty for the RBA.
- The RBA notes a lot of work in the construction pipeline, especially in the residential sector. However, operators are once again facing constraints due to the labour situation, supply chain disruptions and weather disruptions in some regions.
- As one of the country’s major trade partners, China is a cause of concern. Specifically the way it has addressed the recent pandemic outbreak with shutdowns.
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