Deloitte’s Business Outlook has found that the Reserve Bank’s aggressive 50 basis point cuts over the past two months has left the policymaker little wiggle room left if any future issues arise.
In the latest report, Deloitte stated that Australia’s downturn currently remains “well contained” as property changes, government intervention and global impacts will have a positive impact on the Australian economy.
Property
Australia’s economy has slowed due to falling housing prices, meaning consumers are being cautious. Apartment buildings are also falling away, which in turn is dragging down the economy, according to Deloitte.
Drought
Tough weather conditions are making it harder for Australian farmers, which are also having an impact on the Australian economy as a whole.
Although changing weather conditions at some point will leave construction as the new wooden spoon in the national industrial growth league ladder, Deloitte stated.
Construction
State infrastructure remains huge, but it’s not growing, and so isn’t adding any new momentum to the economy.
The softer economy of the moment is putting parts of commercial construction on the back foot.
Domestic stimulus
The election results that reduced policy uncertainty, the big tax cuts coming to Australians, reduced cash rates for investors, APRA loosening restrictions and moderately low dollar are all playing a role for the economy.
Global slowdown’s impact
Despite global slowdown, the world has given Australia a big pay rise, as China stimulus means a surge in the demand for, and price of, Australian coal and iron ore, according to Deloitte.
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