Bank of Melbourne Senior Economist Hans Kunnen has provided a positive view of how the Australian economy will fair this coming year.
Mr Kunnen was speaking at the 2014 Master Builders Members Conference earlier this month.
In his speech, Mr Kunnen said that negative reports about Australia’s economic prospects were exaggerated and that there was a lot to look forward to.
“We almost did go down the gurgler five years ago when the GFC hit,” he said.
“There is some semblance of optimism. Victoria creates 50,000 jobs each year.”
Globally, Mr Kunnen observed that the US market was recovering slowly, China had solid growth “but risks exist” and Europe is “rising from the floor”.
He also emphasised the growing importance of technology, the housing industry and retail on the economy.
“Technology is changing the way we work, the way we live and what we do – jobs come from services,” Mr Kunnen said.
“There is a demand and growth in the building industry in Victoria, we need population increases and migration,” he said.
“People love shopping again. Retail sales have recently picked up. It is an investor and consumer led economy.”
Mr Kunnen flagged a long run average economic growth rate of 2.9 per cent per annum.
His forecast was optimistic, especially for the construction industry.
“There will be improving global growth, slow but improving growth for Victoria,” he said.
“Interest rates will stay and we will see a slightly weaker Australian Dollar. Demand for construction is rising.”
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