The many speed economy

Roy Morgan has an interesting chart out this evening examining business confidence across industries. Presented without comment, the houses and holes confidence chart:

David Llewellyn-Smith


  1. Modest confidence across a range of sectors, finance a little optimistic given recent events?

    More than just manufacturing a little worried, construction a big concern imo.

    • Yeah, the confidence figures for finance and education are both a big surprise. I can only assume that this is the view from the top, not grunt-level.

      • What? As in what has that got to do with confidence…also as you know from your earlier days, construction component is somewhat erroneously recorded. It still matters.

        Happy to see confidence in any sector, always hope it comes to fruition.

        • Retail (discretionary) is the first domino to fall.

          From the late 80s and early 90s investment in the Pilbara was insane, far greater than now (Woodside AND Iron via Robe, HI and BHP) and didn’t prevent a recession nor double digit unemployment.

          Mining is meaningless to 97% of greater Australia.

          • If we both agree that the end of the credit era may be devastating – I’m with you.

            I well understand that resources punch above their weight in terms of comparative employment – there are other pluses. Ones which governments really like (not too mention mining companies).

            V, I know you know resources will play its role but is dwarfed by the magnitude of the unwinding about to take place.


          • Mining is meaningless to 97% of greater Australia.

            I doubt 97% of Australians agree with you!
            If you are saying that mining is not beneficial, in any way, to 97% of Australians you don’t understand this economy at all.

          • Really? Please explain how a sector that employs 1.8% of the workforce benefits Bob Beerslab in Kenmore who works as a manager at Coles and his wife who works for QLD health as a nursing assistant.

            Please explain how the building and commissioning of Woodside’s gas ‘system’ (biggest infrastructure investment in the world at that time) in the Pilbara and about 9 Irons Iron being built prevented unemployment jumping from <6% to almost 11% and a house price slide.

            Keep believing the spin.

    • I missed one important bit from his interview:

      “I’m sick and tired of hearing economists tell us that you’ve got to crowd out good jobs in manufacturing, crowd out good jobs in the finance sector, crowd out high-paid, high-skilled jobs because we’ve got a mining bubble.”

      • I cannot bear to hear from Cameron. On his watch, with his eye diverted to Labour preselection, securing his personal future – he oversaw a period of significant offshoring. Even the GreenLeftWeekly was calling Cameron’s card. Seriously, the bloke is a joke. Yeah, OK now. Senator. Senator. Has somewhat remarkably from his comfortable pensioned privileged tower ‘rediscovered’ the common man.

        Don’t buy it. Cameron is an embarrassment.

      • The ‘crowding out’: Actually I have never heard any relevant economist say any such thing. Evidence please.

    • Mining is not the problem. If it were we would have been running a Current Account Surplus. Capital flows are the problem.
      Everyone needs to get this really clear somehow.

      • Too true flawse

        we have discussed this topic as a side issue earlier but it is underated as the soft underbelly of the economy and Australia’s potential prosperity.

        Why? Because it requires a political solution.

        Unlikely while parliament is the prefered destination of so many self-seeking invertebrates.

        • First post, love the site and all the discussion.

          My understanding (and I’ll admit it’s limited) is that a lot of the problems in retail, manufacturing, education, etc. stem from the appreciation of the $A, which is predominantly a result of mining exports.

          Is this incorrect? I’d appreciate some more detail around ‘capital flows’ being the problem.

          • The high AUD has little to do with mining. Consider the times its been near 50c and up to 98c and down to 60c. Did mining stop?

            Mining is not a problem in any way shape or form. Its part of the primary sector. The shrinking secondary and expanding tertiary sectors are the problems.

  2. Runalltheway – good point. I’ve worked at a senior level just below management in a couple of big companies and it’s true that management often talk optimistically even when they have no right to do so. Sometimes they really are deluded, other times they know the truth but bullshit. All part of the game

    • Now that really does sound like management at many levels of Australian industry, resources excepted of course.

    • Matthias,
      Yes, that’s unfortunately par for the course. Speaking as one of the finance grunts that may be in-line for ‘adjustment’, I have a lot more respect for the straight shooters.

      However, I would have thought that senior people would be smart enough to massage their message in this type of industry wide survey – negative results do increase the chance of a juicy government hand out.