Exclusively from Gerard Minack.
A housing boom prevented the 2014-15 commodity bust pushing Australia into recession. Now, however, pressure on consumer incomes is increasing the risk that even a moderate downturn in housing could cause a recession in 2018.
Australia coped well with the mining boom busting in 2014-15. Even so, growth has run below trend through most of the past 4 years, as evidenced by the rising unemployment rate. The degree of slack in the labour market has been partly obscured by declining labour participation (Exhibit 1).
