Australia's Economy Booster
Written by Allie Schratz
As the mining industry imports more drills and pipes to fuel the booming resources economy, other industries such as tourism and retail are suffering, according to The Australian.
In order to sustain this growth, however, the Reserve Bank of Australia is urging the nation to “significantly” boost its productivity and up the surplus, which fell for the third consecutive month in November.
"For Australia to fully capitalise on the new possibilities, both businesses and government need to be focused on improving how things are done and addressing inefficiencies in regulation and business practices," according to an RBA central bank paper released last week. These efforts will include increasing labour wages as living standards rise.
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The paper went on to say that the commodities demand is receiving a large amount of support from foreign investment, benefitting the mining boom.
Among the challenges ahead is the switch from carbon-based to renewable initiatives and the need for households to boost savings rates as Australia works to increase its revenues in other industry sectors.
"Normally we'd see these consumer goods increasing in the lead up to Christmas but we know retailers have been running down inventory and subsequently not importing as much," ANZ senior economist Julie Toth told the Herald Sun.
"This correlates to a strong transition in the economy from consumer spending to investment spending and that's likely to pick up through 2012.
“Capital investment is taking over as the driver of growth."