Global Economy Essay

The Australian PMI has been mostly below 50 with an average of 47.98 in past 12 months and an average of 47.94 this year, which suggests a likely contraction in manufacturing. Fluctuation is expected due to its volatile nature but a large percentage change is likely to drive the economy. A 14.03% growth in July is expected to lead to an increase in the coming month but contraction may continue in 2015-2016. From these PMI figures, Australia’s economy might not be performing at its best. The industry might suffer

The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.

Between 2000 and 2016 Australia underwent the most dramatic mining increase because the Victorian gold rush. Investment in the sector, widely defined, quadrupled. The additionally fuelled growth in a huge vary of industries servicing the sector, in particular engineering construction and business services.

This report will show an overview of the current state of the Australian economy and its management by the Federal government through examining economic indicators such as economic growth (GDP), unemployment, inflation and trade.

It is said that we are living in turbulent times. The Australia’s once-in-a-century commodity boom has reversed, leading many miners to cut back on investments and consolidate; which is expected to generate great social and economic hardship throughout these years. While more hope is casted into the construction sector, a cooling change blows in the housing market. Unemployment is tipped to rise and when it reaches a record high; consumption will continue to grow at a below-average pace, so business sentiment will remain fragile. Rather than fuelling the economy, the fiscal policy keeps straining it whilst the monetary policy will struggle to have an impact – indicating that the Australian economy is slipping downwards.

Australia has been expanding the economies and becoming the wealthiest nations in the Asia-Pacific regions. The old Labor government use a fiscal policy by increasing the government spending in the Global Recession in 2009. Australia generates the mainly sources of exporting form mining and agriculture, and its services, technologies, and high-value-added manufactured goods are competitive international standard. Australia draws attention to foreign investment with foreign competition and a skillful workforce in almost all industries. The government involves less in the most area of the market and the competition in financial services has increased. Government debt is increasing because of the global financial crisis but it is lower than the

This increase was largely due to the expansionary fiscal policies that many countries adopted in response to the Global Financial Crisis.” According to estimates, Australia is supposed to minimize debt that is slowly growing by 2018. Australia’s income is slower than what others expected and there has been an increase in unemployment (Carmignani

An increase or decrease in the unemployment rate can have a multiple effects on the Australian economy, both beneficial as well detrimental to the economic conditions and the societal outlook.

The article ‘ Strong jobs figures put rate cut in doubt’ described that there is an increase in employment in the last one month which might help in putting hold to rate cut by Reserve Bank of Australia. There are positive signs in Australian job market with increase in 44000 employed people showing signs of recovery and better production levels. This will also increase private consumption giving rise to increased demand.

Figure 4.0 depicts how Australian labour productivity has increased significantly over the last two decades, but real wages lag behind significantly. One contributing factor to this could be the profit produced from the increased productivity has not necessarily been redistributed as increased wages for employees. An increase in wages will increase in consumer spending on goods and services as well as better living standards. This increase has the follow-on effect of creating additional labour requirements for the unemployed. Figure 4.1 displays the trend of how the nominal and real wage growth has been slow and even dipped into negative rates.

Lately, the government of Australia has seen a good jump in its job market, which made it good

The unemployment rate has decreased a significant amount. A main cause of this is the government working hard to reduce taxes and regulatory burdens within businesses. The government is also working on improving working conditions. Eric Abetz, the Australian Minister for Employment stated that Australia is, “recognizing that it is businesses which create jobs, not government” (Abetz,14). This shows that the government is focusing on the businesses themselves rather than creating new jobs. With the businesses having success, this will lead to creating more jobs for those unemployed. Australia is encouraging everyone in the country to participate in the labor force as they do everything they can to improve it. In January of 2016, Australia’s unemployment rate was just at 6.4%, and since then it has not hit that high number again. Over the past three years the unemployment rate has taken a full turn around. As of July 2017, it is now at about 5.5%.( Figure 2*) Middle Eastern migrants take up most of the unemployment percentage, they find it very difficult to find jobs in Australia. They have a 33% jobless rate within their five years of living in the country. The unemployment rate for them is around 17.5 %, this is compared to the 3.6% for southeastern Asians and 1.9% for

The Victorian economy stands strong with a 4.5% state final demand growth recorded in the year March 2017, outperforming NSW and QLD. Victoria’s growth is being driven majorly by the population growth, growing 2.4% in 2016, outperforming all other states. State labour market conditions have remained positive with 64000 full time jobs created in the year to May 2017. Being stronger than NSW with only 43000 full time jobs created. On the other hand, while having a solid stable labour market it has its flaws, and a retail turnover growth has continued to slow, evidently granting it a 3.6% annual growth recorded in May 2017. While this may the case this was greater than the national growth rate by 0.5% at 3.1%. Looking at the Victorian economy it is most certainly seen as robust due to the diversity and strengths in the financial and professional services sectors.

In March 2015, Greg Jericho published an article called Weak, weak growth and six things about the state of Australia’s economy that outlined how in the past 6 out of 10 quarters the Australian

In the past quarter the unemployment rate in South Australia has remained steady at 5.6% (Australian Bureau of Statistics, 2009) but this figure is volatile and may increase next month. The youth unemployment rate, however, in South Australia remains at 21.9% with the Western and Northern suburbs having significantly higher