Services sector to drive economy
(13 July 2015 – Australia) The nation’s economic recovery will be driven by Australia’s services sector as mining sector investment begins to fade, according to HSBC chief economist Paul Bloxham.
Bloxham said it was likely tourism and education would lead the rebalancing, with growth shifting from mining and activity picking up in other industries.
"There's strong growth in tourism arrivals particularly from China, we've also seen ... international student enrolments hit new highs this year."
He said low interest rates were lifting house prices, which was flowing through to more residential construction.
Foreign demand for local services would also continue to be supported by free trade agreements recently signed with China, Korea and Japan, Bloxham said.
A focus by politicians on infrastructure investment could help lift services-driven growth even more, Bloxham said.
"What would help is a focus on tax and regulatory reform and building infrastructure to improve local competitiveness and support a services-driven upswing in growth," he said.