Australia’s Economy Shrinks Most in 20 Years as Floods Hurt Coal Exports. The Independent
While single reasonings make the headlines, there is a far more sinister set of numbers driving our GDP downward. For raw material exports account for a small fraction of Australia's GDP. And like the US, Australia is a service-oriented economy, which makes up 75% of its total GDP.
Retail sales, have gone backwards due to the household savings rate ticking upward. Economists generally applaud debt deleveraging, but the consequences can quickly become a snowballing of deflation. The Half-yearly sales, and deep discounting, may in fact get shoppers out for next quarter's GDP figures, but it won't help the prosperity for Australian retail. Lets not to forget that the Internet economy is robbing Australian retail, because even with the extortionate postage costs, its still cheaper to buy online.
Secondly Property Prices have peaked in pretty much all capitals, except federal government land (Canberra). So the decade long Greater Fool property market, or buy and flip is over for the moment. But this also bad news for the armies of tradespeople around the country. The idea that one can mortgage to increase equity in their homes with new swimming pools or extra bedrooms is a fools game now.
Lastly the strong Aussie dollar is sending our hard earned money overseas. Australians are going to Europe and America for their holidays now. Inbound tourism is flat too, tourists from all over the world can find much cheaper alternatives to our offerings. Leaving resorts all around the country to vie for a smaller slice of the tourist dollar.
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