Economic Outlook

Outlook 

Australia’s economy is subdued given sedate retail spending and weak housing construction activity. Consumers are understandably reluctant to spend given high inflation and interest rates. The RBA’s surprise 0.25% May interest rate hike only added to the worry list. Inflation pressures remain stubborn with strong rises in electricity and rental costs pushing April’s consumer annual inflation to 6.8%. Housing is complex as house and apartment prices have rebounded, but there has been a big slide in new housing approvals and a rise in insolvencies amongst builders. There are also signs that the labour markets strength is fading with a loss of jobs in April and the unemployment rate edging up from 3.5% to 3.7%.

Article written 5 June 2023.

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