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Property and Finance Brief 26 April 2013
Positive outlook for Queensland
The latest Deloitte Access Economics Business Outlook report, released today, paints an optimistic picture for the state. Deloitte partner Chris Richardson said he expected the negatives of recent years to pass in the next financial year, with Queensland to "carve out a greater share of the national economy".
Gross state product is forecast to increase from 2.3 per cent this year to 4.4 per cent in 2014. Mr Richardson said the state's population growth was improving and while an immediate surge in housing construction was unlikely, "the outlook is for a sustained upswing in construction levels that will be a key component of the national recovery". Master Builders yesterday said new dwelling commencements had started well this year - up 3.8 per cent in January - and "indications are that this trend will continue". The report forecasts unemployment to peak at 6 per cent in 2013-14 before falling each year to 5.2 per cent in 2018. Queensland's population is expected to grow steadily at 2 per cent and will reach the 5 million milestone in 2016-17. Retail sales growth, which has languished on the back of low consumer confidence, is expected to fall to below 2 per cent next year but surge the following year before hitting 5 per cent in 2016-17. More rate cuts to come?
The March quarter inflation rate was significantly below expectations, rising just 0.4 per cent in the quarter for an annual increase of 2.5 per cent. The underlying inflation rate was also lower – rising just 0.4 per cent, on average, for the quarter and giving an annual rise of 2.4 per cent.
A key thing to note however is the figures are artificially boosted by the carbon tax which was expected to have a 0.7 percentage points impact on headline CPI. Therefore it could be argued that headline inflation actually sits at 1.8% outside the RBA’s target band of 2-3%
Given the state of the Federal finances and the desire to keep things tight it seems unlikely we will see much of the way of fiscal stimulus in the near term.
Looks like the ball is back in the RBA’s court.
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