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OCTOBER 2010

Economic Update

Professor Neville Norman, Melbourne University

Professor Neville Norman, Melbourne University

Australia's economic recovery from the GFC is turning into a drawn-out affair, but it's still the envy of many other countries, especially in Europe. After positive signs in the early part of the year, some indicators of confidence are turning negative, partly because of the current political uncertainties and partly because of the sluggish international scene. Growth is still occurring, but it's not as strong as it should have been. More businesses can be expected to fail in coming months, as cashflow problems and lack of capital get the better of them. And interest rates will continue to rise, if at a more gradual rate than previously forecast. Be wary of trying to increase prices - your market may not be robust enough yet to accept them.

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