Our economy in picturesPUBLISHED : | UPDATED:
The RBA’s chart pack is out this week, a time for much feasting and celebration among the country’s econ-nerds. The overall picture? Mixed.
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The commodity boom might be behind us, but the juggernaut of investment in digging and expanding new resource projects is yet to peak (see below).
Iron ore prices have bounced back up after last year’s hiccup, while thermal coal prices seem to have stabilised somewhat. It’s still too early to tell with coking coal (used in the production of steel), but recent reports from China suggest the country may be approaching a peak in its coal demand.
Generally weaker commodity prices have put an end to the bonanza super-profits of the miners. As mining profits as a proportion of GDP shrinks, what will replace them?
Businesses still say they are pessimistic, although there may be signs of an improvement in sentiment. Business conditions are still trending down.
Across to the household sector, and debt levels have stabilised and lower interest rates are taking the pressure off household budgets.
Consumer sentiment is far from terrible - in fact, it’s just about on the average 30-year level.
But retail sales growth has been having a bit of a relapse in recent months, which does not bode well for retailers in the year ahead.
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PATRICK COMMINS Smart Investor