The coming year should be a positive one for the economy despite some volatility in the markets, Bendigo Bank’s head of economic and market research says.
David Robertson delivered his forecast for the year ahead and looked back on the year that was in the keynote address at Be.Bendigo’s State of the Market breakfast event yesterday morning.
Mr Robertson expects the Australian employment rate will continue to improve this year.
He said the latest available data for the Bendigo region, from June 2017, showed unemployment trending downwards.
The fact Victoria’s population was growing faster than that of any other state, Mr Robertson said, was feeding through to business sentiment.
He also expects there will be only a slight increase in interest rates.
Mr Robertson told the Bendigo Advertiser that these factors combined to a positive outlook.
At yesterday’s event, he said he expected housing prices would remain relatively stable this year, with growth in regional Victoria having levelled off over the past year.
Mr Robertson also delivered the prediction that Australia would experience growth of between 2.5 and 3.5 per cent, with no recession.
He said the last time Australia had a recession was 27 years ago, or 10 years ago if the “mini-recession” sparked during the global financial crisis was counted.
This was despite Australia experiencing, on average, a recession about every eight years.
Mr Robertson said he expected the Australian dollar would remain above US$0.75, but would be weaker against other currencies.
Looking at the current state of play, he said Australia had a low debt-to-gross domestic product ratio.
But he acknowledged household debt was still “far too high”, with debt-to-income ratios and house price-to-income ratios having reached record highs.
Mr Robertson advises that local businesses ensure they can adapt to rapidly changing technologies, and understand their customers’ needs so as to better meet them.