A weak tail wind to temper Australia’s strong growth in 2015
Guest observation
Every year for the last 11 years, we have sent a letter to the leaders within our top 20 clients predicting key trends in the year ahead, and reviewing those from last year’s letter. So here is an edited version.
In our letter last year, we forecast that:
In 2014, our economy would be funded via shoppers’ shopping. For houses, and things to go in houses. For cars made cheaper by the normalising of our prices with the rest of the world, and the exit of government subsidised manufacturing. Clothes prices would drop as new global retailers launch on day 1 with cross-channel retailing, allowing Australians from Melbourne to Mildura, Sydney to Sawtell, Brisbane to Bundaberg to buy goods in or outside a store.
We also opined that:
Our productivity gains would be driven by lower interest rates and a lower dollar, our cost of living dropping, and new jobs being created by new retailers.
Looking back over the year, much of the forecast was accurate, though we still have much more to do to create a more productive Australia.
As we enter our 12th year of predictions, 2015 is proving a tough one to predict. Whilst the US, UK and New Zealand have all been through transformational change since 2008, delivering more flexible and nimble economies, creating new jobs in old and new sectors, our own pace of economic and social change has been glacial.
So in 2015 we face the full impact of the loss of the ecosystem of our car manufacturing industry, plus a slowing in the mining sector. Our lower dollar and low interest rates will help our omni-channel retailers to compete against global omni-channel retailers, creating jobs in the retail sector. Our tourism industry will grow aided by our weaker dollar keeping cautious Australians at home and increased confidence and spend amongst European, North American and Asian travellers, creating jobs in hospitality and tourism services.
Once again, but this time with a very weak tail wind, our lucky country should grow, for the 24th consecutive year.
Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings.