Signs are good that Australia has turned the corner

David Bryant image

David Bryant

There have been strong signals over the past week that the Australian economy has turned the corner and things are starting to look up, said David Bryant, chief executive officer at Australian Unity Investments.

“Australia seems to be on the cusp of a growth upswing, with the latest GDP and household consumption figures providing good news.

“The GDP numbers released earlier this week were the best in four years, showing GDP is up over three percent for the year. If you excuse last June, which was weak, the last three quarters are running at 3.7%.

“It was also very pleasing to see household consumption added almost half a percent to the GDP increase, and it was widespread across a number of areas.

“The only real area of concern was the lower engineering, construction and business building figures, but these were not really a surprise.

“In my view, the Australian economy has turned a corner, at least at an individual level.

“Employment, consumption, exports, tourism and building approvals are all strong or steadily improving.

“Most encouragingly, it looks like the much-needed transition from mining to housing to the consumer has occurred, now we just need to get business properly on board.

“While there are still some headwinds to the economy that need to be taken into account, the overall picture is one of slow growth and recovery.”

Mr Bryant said that while the ASX was sold off earlier in the week, this was because there was an expectation of lower GDP figures, and the fact there may now not be another interest rate cut saw some profit taking.

“The sharemarket appears to be comfortably trading within a 5,300 to 5,400 range and it seems likely that it will continue within this range for the short term, with some slow move upwards most likely.

“Australian investors should feel reassured by these stronger economic signals,” My Bryant said.

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