The majority of growth in the economy over 2013 will be driven by the mining and resources sector, according to a new report from PRDnationwide. While this investment is forecast to peak late 2014, the effects won’t be felt till the latter half the decade.
The Australian economy is forecast to contract in 2013 as business conditions remain difficult, according to the PRDnationwide Quarterly Economic and Property Report for Q4.
The majority of growth will continue to occur in the mining and resources sector over 2013, the report says. It says that the mining investment boom is expected to peak at the end of 2014, but will not be felt until latter half of the decade.
In WA there is estimated to be two to three years’ worth projects already underway. In Queensland there are five years’ worth current projects.
According to the report, the high dollar will decline as commodity prices ease and resource investment falls.
Non-mining sectors will expand and transition to the economy’s principal driver of growth, the report says, but prior to this mining investment will continue to rise, by a forecast 22 percent per annum.
Meanwhile below-average interest rates will assist growth in dwelling commencements and household spending, the report says.
The tight property market in Sydney is expected to continue its upswing through 2013 with modest growth of around 5 percent, according to the report.
Mining investment and low interest rates will help Perth markets off the bottom of the cycle over 2013, with 2 percent growth.
The report says Brisbane would have been a similar story to Perth, but recent unemployment rate increases have suppressed growth forecasts.
Adelaide will remain steady over 2013, with a ‘balance between demand and supply’.