Business Monitor International


Australia Business Forecast Report

Published 26 February 2014

  • 51 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Australia Business Forecast Report

Core Views

  • The government's final decision on how to address the wind down of nationalised lender Hypo Alpe Adria (HAA) will have a significant impact on the country's economic outlook over the coming years. We expect the government to establish a 'bad bank' to deal with HAA's toxic assets (totalling over EUR17bn), in a move that will improve confidence in the banking sector, but curtail the government's ability to increase current spending. However, we believe this effect will be mitigated by an uptick in private consumption, on the back of low interest rates, rising house prices and a recovery in consumer lending, as well as an improving export outlook driven by a revival in the wider eurozone economy.

  • We believe the main opposition nationalist Freedom Party of Austria will take first place in the country's elections to the European Parliament, to be held in May. This is on the back of increased apathy towards the governing 'grand coalition' partners (the centre-left Social Democrats and the centre-right Austrian People's Party) as well as votes gained in protest at the government's likely establishment of a publically-backed bad bank for HAA, a move that would be very unpopular among the electorate.

  • We expect euro strength against the dollar and on a trade-weighted basis to persist in H114. However, we continue to argue that the economic and monetary policy cycles in the eurozone are lagging further behind peers in the US and UK, which will trigger a re-pricing of the euro towards the end of 2014. Indeed, we believe that weak eurozone economic growth and lingering deflationary risks will spur the European Central Bank into loosen monetary policy further.

Major Forecast Changes

  • The government's target of eliminating the budget deficit by 2016 will be rendered unfeasible if it decides to go ahead with the creation of a bad bank for HAA. We believe this option will prove more palatable, given that the other option of allowing the bank to become...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Political Gridlock Could Cause Climate Change Policy Vacuum
8
Table: Political Overview
8
TABLE: Minority Parties & Independents Within The Australian Senate
9
Long-Term Political Outlook
10
Three Key Challenges: Population, Climate Change, China
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Weak Job Market Print Suggests Further Slowdown Ahead
14
TABLE: ECONOMIC ACTIVITY
14
Fiscal Policy
15
Weaker Federal Finances To Intensify Pressure On States
15
TABLE: FISCAL POLICY
16
Monetary Policy
17
Economic Deterioration To Reignite RBA's Easing Bias In H214
17
TABLE: MONETARY POLICY
17
Balance of Payments
19
Trade Positives Insufficient To Support AUD In 2014
19
TABLE: CURRENT ACCOUNT
20
Chapter 3: 10-Year Forecast
23
The Australian Economy to 2023
23
Exports And Immigration Key For Long-term Growth
23
TABLE: Long-Term Macroeconomic Forecasts
23
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Trans Pacific Partnership: Conclusion To Remain Elusive In 2014
28
Business Environment
29
Institutions
29
Table: BMI Business And Operation Risk Ratings
29
Table: BMI Legal Framework Rating
30
Infrastructure
31
Table: Labour Force Quality
31
TABLE: ASIA - ANNUAL FDI INFLOWS
32
Market Orientation
33
Table: Trade And Investment Ratings
33
TABLE: Top Export Destinations, 2002-2009
34
Operational Risk
35
Chapter 5: Key Sectors
37
Autos
37
TABLE: Automotive Sales, 2011-2017
38
TABLE: Autos Production, 2011-2017
39
TABLE: Autos Trade, 2011-2017
40
Food and Drink
41
TABLE: Food Consumption Indicators - Historical Data & Forecasts, 2013-2018
41
TABLE: Alcoholic Drinks Value/Volume Sales - Historical Data & Forecasts, 2013-2018
42
TABLE: Mass Grocery Retail Sales By Format - Historical Data & Forecasts, 2013-2018
43
Other Key Sectors
45
table: Telecoms Sector Key Indicators
45
table: Defence and Security Sector Key Indicators
45
table: Pharma Sector Key Indicators
45
table: Oil and Gas Sector Key Indicators
46
table: Infrastructure Sector Key Indicators
46
table: Freight Key Indicators
46
Chapter 6: BMI Global Assumptions
47
Global Outlook
47
Fairly Benign Prognosis
47
Table: Global Assumptions
47
Table: Developed States, Real GDP GrowtH, %
48
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
48
Table: Emerging Markets, Real GDP Growth, %
49

The Australia Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Australia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Australia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Australia's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Australia's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Australia, including currency volatility, the commodity price boom and protectionist policies.

The Australia Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Australia economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Australia through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Australia Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Australia and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Australia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Australia over the next 5-years?

BMI's Australia country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Australia Market - Political Strengths, Weaknesses, Opportunities and Threats facing Australia.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Australia's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Australia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Australia, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Australia's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Australia will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Australia's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express