The results are in!

Every year, the Australian Business Economists’ Association (ABE) compiles an economic and financial survey of the executive committee.

This committee represents 22 institutions, and the survey asks the committee members a series of special questions. These questions vary from topics such as the Reserve Bank cash rate, China, the US economic outlook and commodities – among many others.

Many industries and experts look to the annual survey as a great source of financial and macroeconomic forecasts for the year ahead and beyond.

We thought we would share with you 20 highlights to come from the results of this year’s survey.

1.  The 2017 Australian economy is expected to grow at a similar pace to 2016.
2. Economic growth is expected to be moderate and driven by strength in net exports and growth in household consumption.
3. Dwelling investment will also add modestly to growth
4. Business investment is expected to contract again.
5. Low interest rates and strong population growth have supported dwelling investment.
6. Dwelling investment is forecast to grow by 1.4% in 2017.
7. The Committee expects export volumes to grow by 7.5% in 2017 and by 6.3% in 2018.
8. Low interest rates, firm growth in house prices and a relatively tight labour market have given support to household consumption.
9. Household consumption growth is forecast to moderate slightly in coming years, to 2.5% in 2017 and 2.6% in 2018.
10. The Committee expects growth in wages to remain weak over the next two years. The Committee expects the labour price index to rise by only 2.1% in 2017, following estimated growth of 2.0% in 2016. For 2018, an increase of 2.5% is the median forecast of the Committee.
11. The Committee’s expectations for headline inflation are towards the bottom of the RBA’s 2%-3% per annum target range.
12. The median forecast for headline inflation growth in 2017 is 2.0% and 2.1% in 2018.
13. The median forecast for underlying inflation growth is 1.8% in 2017 and 2.1% in 2018.
14. The Committee expects the RBA to leave the cash rate on hold at 1.50% for all of 2017 and 2018.
15. The range of forecasts for the cash rate at the end of 2017 ranges between 1.00% and 1.50%, indicating that the Committee sees a risk of an easing.
16. The Federal Government’s headline budget deficit is expected to improve over the forecast period, according to the median forecast of the Committee.
17. A deficit of A$36.1 billion is expected in 2016/17, after an estimated deficit of A$39.6 billion in 2015/16. A further improvement to a deficit of A$26.6 billion is forecast for 2017/18.
18. The Committee expects the Australian dollar to end 2017 weaker at US$0.7000, down from its current level of around US$0.7646 (as at 6 February 2017). The range of forecasts for the end of this year is wide at US$0.63-0.78 and for the end of 2018 US$0.65-0.80.
19. The ASX200 share market index is forecast to be 3.2% higher (at 5,775) by the middle of this year and 7.2% higher (at 6,000) by the end of this year from its closing level of 5,597 on 6 February 2017.
20. The ASX200 is then expected to increase a further 4.6% over 2018 to end the year at 6,275.

So if the ABE Executive Committee are right, it seems there are signs of moderate economic growth as we head into 2018 – proving a solid step in the right direction for the Australian economy. Especially if the committee does not foresee the RBA cash rate rising anytime in the near future… and dwelling investment is forecast to grow by 1.4% in 2017!

Here at HSBP we constantly have our finger on the pulse when it comes to real estate and the local economy. So if you are looking to buy or sell a property in Brisbane, contact a team that really knows their stuff – call HSBP on 0419 782 133.