What to expect from the Australian economy in 2020

What to expect from the Australian economy in 2020

Welcome to 2020 where the job industry is looking more optimistic and the Reserve Bank may have one more interest cut up its sleeve. Here’s a summary of what to expect from the Australian economy in 2020.

Australia’s gross Domestic Product in 2020

Australia’s annual Gross Domestic Product will exceed $2 trillion in 2020. The Annual GDP growth is forecast to hit 3 per cent by year end, picking up to around 2.5% by mid-year. This is a positive outlook for the Australian economy and we have contributors such as public sector spending on infrastructure to thank. Australia’s positive economic growth in 2020 can also be attributed to “household consumption aided by a positive wealth effect (house prices) and savings that are able to be deployed for spending.” According to Yahoo Finance.

What will happen to the Australian job market in 2020?

Unfortunately, it’s looking as though the labour market will remain below the trend growth rate. This will result in a 0.75% downturn in annual employment growth in the first half of 2020. The unemployment rate will most likely be nearer 5.5 per cent than 5.0 per cent. It’s not likely salaries will increase in the first half of 2020. 

“Only when the unemployment and under employment rates fall below 5 per cent and 7.5 per cent, respectively, is it reasonable to expect wages growth to exceed 2.5 per cent.” Yahoo Finance

Industry growth predictions in 2020 

On the plus side, according to the Australian Bureau of Statistics Labour Force Survey, employment is projected to increase in 16 of the 19 broad industries over the five years to May 2024. 

“Health Care and Social Assistance is projected to make the largest contribution to employment growth (increasing by 252,600), followed by Professional, Scientific and Technical Services (172,400), Education and Training (129,300) and Construction (113,700). Together, these four industries are projected to provide over three-fifths (or 62.1 per cent) of total employment growth over the five years to May 2024.” Australian Bureau of Statistics Labour Force Survey