Market/Finance News Blog: Services leading Australia's output

By the resi financial blog team, 21 October 2014

Market/Finance News Blog: Services leading Australia's output

The Reserve Bank of Australia's (RBA) Statement of Liabilities and Assets was released on Friday October 17, shedding some light on the overall financial outlook for the country.

Economic growth for the nation as a whole increased from 2013 and stood at a healthy 3.1 per cent, ahead of inflation at 3 per cent.

The official cash rate, as we know from previous announcements, has remained at it's all-time low of 2.5 per cent, and the average price for residential homes across the country is now at $555,000, RBA data shows.

Ageing population and demand for services

A concerning statistic released by the RBA is the industry share of output. The majority of production in the country came from Services, which stood at 56 per cent of total output.

Retail trade made up 5 per cent, construction at 8 per cent, mining at 9 per cent and manufacturing stood at 7 per cent.

In an advanced economy, this in and of itself is not a concern, but with Australia's ageing population, the human resources needed to fill that sector may no longer be available as time goes on.

Not only that, but an ageing population demands more services, and less goods, according to Christopher Kent, Assistant Governor (Economic) of the RBA in his address to the Leading Age Services Australia (LASA) National Congress on October 20.

The ageing of Australia's population is a natural phenomenon and has come about from a combination of factors including the baby boom after the second world war and drops in fertility rates after that.

"The third force driving population ageing is rising longevity. Australians born today can expect to live nearly 25 years longer than those born a hundred years ago. The increase in life expectancy has occurred throughout this period and appears to be ongoing," said Mr Kent.

Looking forward

As the population continues to advance in years, the impact on economic output will become a serious concern, especially as more services are demanded.

If planning for your retirement and future well-being is something that is on your mind, talk to a resi loan specialist today, to ensure that you stay ahead of the curve.

Categories: Financial Services