The Weekend Financial Review ran several articles, which seemed to echo many of the sentiments contained in my last blog about the Capital City Markets — but perhaps putting things a little more bluntly.
In his view, Anna Bligh will call an early election today or tomorrow, for late March — before unemployment sky rockets, and the likely tax increases in her June budget.
Andrew Burrell (on page 30) felt that the “abrupt end to Perth’s party has been made harder by the fact that few saw it coming.”
Like Queensland, WA has been heavily dependant on the resources boom — which some predicated would last for 50 years. As such, the general feeling has been that any downturn would simply be confined to the east coast.
In fact, many still seem to be in denial as to the impact that this sudden fall in global demand for resources will have.
However, the momentum supporting artificially high prices for both Commercial and Residential property has simply evaporated in Brisbane and Perth.
h3. On the brighter side …
Alan Mitchell (on page 42) notes that “the construction industry will do surprisingly well.”
Both state and federal governments are implementing stimulus packages and first home-owner grants to kick-start building again. Plus, a new school building program was announced this month.
This, along with the home-insulation scheme, will amount to some $13 billion in 2009-10 … and totals about 10% of what is normally spent on construction by the private sector.
Furthermore, manufacturing will be a clear beneficiary of the falling Australian dollar — making us globally more competitive.
And, in turn, this may well help to cushion the mining industry to some extent — given their massive capital investment in recent years will leave it with increase capacity and improved production efficiencies.
Here’s the thing: While world demand may have fallen … our international competitiveness has considerably improved.
h3. And for Victoria specifically …
As tragic as the recent Bush Fires have been for all of those affected … it does mean our State will see a level of capital expenditure far above all the other states, over the next three years.
More 1,000 homes are to be replaced; even more cars purchased; and a whole range of other community and sporting facilities rebuilt.
Billions of dollars are already starting to flow from insurance payouts, Government grants and the amazing level of community donations.
However, if the sentiments expressed throughout yesterday’s National Day of Mounting are anything to go by … this may well be the event needed to galvanise the whole of Australia.
And this will serve to focus our resolve, and win through these tough times — both economic and emotional.