According to a report by the Australian Financial Review, Richard Barkham, CBRE's world chief economist, is concerned that the country is relying on the construction sector.
The economist claimed that excessive dependence on construction could result in a housing correction that would lead to a more general economic downturn. When more than 7 percent of an economy's GDP comes from the construction sector, it can be alarming, Barkham said. The share of Australian GDP from construction is close to 8%.
"This tends to sound the alarm a bit – for the period leading up to the global financial crisis, construction GDP soared to around 10% in the United States, which means that it's only a matter of time. a price I think the Australian central bank is watching it closely … even a seriously serious correction is better than a subsequent handling of a major accident in the property sector, "said Barkham
Construction activity during the December quarter was slower than expected, with total construction of homes in Australia shrinking 3.6% to $ 18.9 billion compared with $ 19.6 billion in the previous quarter. Meanwhile, Australia's economic growth has slipped 0.2% over the same period.
Barkham also observed that the country is very dependent on China. "China is trying to maintain growth and at the same time is trying to restructure its economy in order to move from investment and exports to more internal growth – it's a very delicate balance that is affecting the economy. 39, the Australian economy, "he said. ]
China, however, began to stimulate again, which led to a recovery in its market. This change is expected to have a positive impact on the Australian economy.
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