Now that the Christmas festivities have subsided and we approach the end of the year and the beginning of 2020 it is perhaps appropriate to reflect on what we may expect in the new year.
We have been saying for a while that we are seeing some green shoots in the economy and this is being borne out by a number of reports such as:
Core Logic is predicting that house prices in WA will rise by 6% in 2020. This is good news as after a significant period of decline it appears the market has bottomed out and has started to rise. In support of this, we note a slight rise in property values in November, .4% with December on track to be the second consecutive month of growth.
Whilst the expected growth or improvement will vary from location to location with higher growth in the inner city suburbs and slightly less in the outer suburbs. Nonetheless, this will be a confidence booster for WA.
In addition and as we all know the WA economy is underpinned by the resources sector. To this extent, we are seeing such things as a deal being struck between the USA and WA on the supply of rare earth. President Trump is very supportive of this as he wants to reduce their reliance on China for these products which could prove a boon for the WA economy.
We currently also have higher than anticipated iron ore prices which results in the government having their budget in surplus enabling the reduction in our debt. This is also very positive for the economy and also allows for more spending on such things as infrastructure which has a stimulatory effect on the economy.
On top of this, the Centre for Economic and Business Research is predicting that India will overtake Germany as the world’s fourth-largest economy by 2026. Given that we are currently negotiating a free trade agreement with India this also is good news for WA and Australia in general as this growth will drive demand from our commodities sector.
These are all positive signs for both WA and Australia, particularly given that in WA small business accounts for 97% of all businesses. We are therefore in a prime position to use our great entrepreneurial spirit to capitalise on these issues and go forward into 2020 with confidence.