Economic growth to slow: Residential construction to grow
ECONOMIC growth across the country will remain subdued until at least late next year, with other businesses likely to be slow to take up the slack from falling mining construction, a Deloitte analysis shows.
But the Deloitte Access Economics business outlook for the December quarter of last year also points to positives, especially in Queensland and to a limited extent New South Wales.
The report finds Australia faces a big fall off a "construction cliff" as investment in new mines falls continues to fall this year.
While a lower Australian dollar and interest rates open the door to a lift in residential construction, it could be late 2015 before the benefits start to flow.
The weaker economy will be further hit by softer revenues and stagnant profits across many sectors, with federal government cuts likely to add to subdued expectations this year.
It comes as the heavy-lifting by West Australia's mining sector falls off, but lingering doubts about new sources of growth to take over from that sector dog the nation's economy overall.
But there were some positives, with continued, although slower, building in Queensland's gas industry, expected to face off the full force of a fall in mining construction.
Those gas projects, centred on Gladstone, will help Queensland ride out the problems in 2014-2015, with housing a key driver expected to pick up the slack from 2016.
Although still weighed down by lower returns from coal mining and the pain of state government cuts, the Deloitte analysis summed up the Sunshine State's outlook as: "better than you think".
South of Tweed, New South Wales is still suffering from lingering investment uncertainty, but infrastructure spending and a forecast bump in home building has boosted the state's outlook.
While property prices grew almost 15% last year, an upswing in housing construction has been slow to take off, leaving infrastructure and commercial building key to driving growth.
Key to the state's growth over the next two years will be investment in big developments like Sydney's Westconnex and Barangaroo developments, with lesser road project also contributing.
Nationally, the Deloitte forecast shows government spending will maintain trend growth, despite fears of massive cuts, while positive signs from overseas may not offset weaker signals on non-mining growth.