We are at the bottom of the U and bouncing along the bottom
June 11th, 2009
Property Market Forecaster, Phil Ruthven predicts a pickup in economic activity by December and says that by 2011, Australia will be in the grip of another boom!
The forecaster, who heads up IBISWorld, has been at odds with economists, predicting that Australia could avoid a recession altogether or at worst, experience a very shallow recession. Now, after the release of the March quarterly figures that show the economy grew by 0.4%, Ruthven is very optimistic.
I have done my own research to back up that of Ruthven and have confirmed market movements in the United States as well as New Zealand, with the general consensus of my colleagues indicating that conditions are improving.
Ruthven believes capital expenditure could drag Australia into negative territory in the June quarter. “And that might even continue into the September quarter. Capital expenditure is a lag indicator, like unemployment, and we are only seeing the impact of it now.” All recessions of the last 59 years have been caused by the collapse of capital expenditure not consumption expenditure.
“I wouldn’t completely rule out the fact that we won’t still have a recession,” he says. “But if we do, it will be very shallow and nothing like 1992-93. We are not through the worst yet. We are at the bottom of the U and bouncing along the bottom.”
He says we might also see dips in confidence with bits of bad news and difficulties with the export market. “The rest of the year will be bumpy, but daylight has appeared.”
This makes now the best time to buy, please contact either Mandy Harry of 0418 724 021 or Bianca Moeschinger 0449 888 688 to discuss your buying or selling needs.
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