The Australian economy has barely budged from the global recession that hit in 2015, and it is facing its biggest slowdown in three years, according to a new report.
The Australian Bureau of Statistics has released its latest quarterly economic outlook for the year ahead, with a focus on the economy’s potential to grow faster in the future.
While it does not yet have a forecast for economic growth in the next four years, the bureau projects that the economy will grow at a rate of around 6 per cent this financial year, and 8.5 per cent in the following four years.
That would be its slowest annual growth rate in more than two decades, and its lowest since the late 1990s.
“The underlying momentum in the economy has continued to pick up since the election of the Turnbull government,” the ABS said.
“[However] there are concerns that Australia’s growth prospects are not yet strong enough to support a more sustained recovery in the medium term.”
It said the economy had become more reliant on the services sector, with the number of Australians employed in retail, hospitality and the construction sector more than halved between July and September.
And it also saw the number in jobs fall by almost a third over the same period.
Economists say the downturn has been exacerbated by the global financial crisis, which has seen the value of the dollar plummet against other major currencies.
Australian companies are struggling to adapt to the changes to their trading strategies that have emerged as the global economy has weakened.
But while the slowdown has been more noticeable in sectors like manufacturing and mining, the ABS says the economy is also suffering from a slowdown in service sector activity.
There were just under 10,000 fewer jobs in the mining and manufacturing sectors last year compared to the year before, the agency said.
In a recent report, the Australian Chambers of Commerce (ACCC) said the recession and the resultant weakness in the construction industry were driving up costs for businesses.
ACCC president Mark Porter said the lack of growth had caused the economy to slow down and create an oversupply of skilled labour.
“The impact of the downturn is not just on the private sector but on the Australian economy,” Mr Porter said.
What the Government is trying to do is to try and help the private and public sectors deal with the consequences of the economic downturn.” “
There’s an enormous number of factors that have led to this.
What the Government is trying to do is to try and help the private and public sectors deal with the consequences of the economic downturn.”
While the downturn in manufacturing is more pronounced, there has been a sharp rise in the number who are in low-paying occupations.
According to the ABS, there were more than 16,000 people in the lower paid service sector in September.
Of those, more than 10,700 were employed in health and social services, with nearly 7,000 in social care.
At the same time, there was a sharp decline in the numbers in the low-paid sectors.
Around 6,500 people were employed as waiters and waitresses, down from nearly 13,000 a year earlier. AAP/ABC