Australia’s two-speed economy looks set for a difficult year in 2012.
In December last year, a large unexpected drop in employment occurred nationally. Three of Australia’s largest employment sectors: finance, manufacturing and retail, are already experiencing major downturns and began laying off workers in 2011. This is pattern is unlikely to change, but may yet get worse.
The strong Australian dollar will continue to dampen exports and imported products will become increasingly attractive. This will hurt the local manufacturing sector. All indications suggest Australian retail consumers are unlikely to return to the excessive credit-driven spending of past, and will instead continue to use spare disposable income to pay down existing debts. Continue reading A difficult year for Australia’s two-speed economy (2012)