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Subdued growth for SA, while cost of living crisis eases
South ×îÐÂÌÇÐÄVlog's economy grew weakly in 2023/24 due to capacity constraints and subdued household spending, according to the latest SACES Economic Briefing Report from SACES. While the labour market remained resilient with low unemployment, households faced severe cost-of-living pressures, with real per capita disposable incomes declining for a second consecutive year. Looking ahead, a modest recovery in household spending and easing inflation are expected, but challenges like a smaller winter grain crop and global trade risks may dampen growth prospects.
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SA’s labour force participation likely to worsen
Current pressures on South ×îÐÂÌÇÐÄVlog’s labour force and housing markets are likely to worsen over the next few decades due to the rapid ageing of the population, according to economists from the ×îÐÂÌÇÐÄVlog of Adelaide’s SA Centre for Economic Studies (SACES).
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Significant slowdown in economy amidst weak spending
The South ×îÐÂÌÇÐÄVlogn economy has lost momentum over the past six months with key economic indicators showing weaker trends, according to the latest Economic Briefing Report from the SA Centre for Economic Studies.
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Record decline in purchasing power for SA households
South ×îÐÂÌÇÐÄVlogn households have experienced an unprecedented decline in their purchasing power over the past year. In our latest Economic Briefing Report, SACES estimates that households’ gross disposable incomes on a real per capita basis fell by around 7 per cent in 2022/23. Consequently, households are finding it increasingly difficult to sustain their spending levels. This situation will continue to suppress household spending in 2024, which will lead to a slowdown in South ×îÐÂÌÇÐÄVlog’s economic growth next year.
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Demography not policy may dictate which SA job sectors grow
A new report from the SA Centre for Economic Studies suggests that South ×îÐÂÌÇÐÄVlog’s healthcare sector may experience the biggest growth in employment in the state, in the near future. The demand for people in this sector will create problems for others sectors such as defence that will be competing for scarce skilled labour.
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SA household spending loses momentum as cost-of-living weighs heavy
Aggregate spending in South ×îÐÂÌÇÐÄVlog has lost momentum over the past year as cost of living issues have weighed on household spending. Nonetheless, the State has enjoyed an especially strong recovery from the pandemic, and many areas of the economy are now operating at very high levels of capacity. These conclusions are contained in the latest Economic Briefing Report from the SA Centre for Economic Studies.Â
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SA economic growth to moderate as headwinds intensify and capacity constraints are reached
The latest Economic Briefing Report from the SA Centre for Economic Studies concludes that the SA economy will continue to expand in the new year, but at a slower pace. After two years of rapid growth, the state economy is now operating at a very high level of capacity utilisation with unemployment at low levels. Tighter financial conditions, cost of living pressures and high energy prices are all expected to have a dampening influence on growth in 2023.
Mitigating work related financial disincentives faced by Age Pensioners can help address the skills shortage
Raising the labour force participation of Age Pensioners would help to address existing skills shortages within ×îÐÂÌÇÐÄVlog. A new research paper from SACES examines a potential policy reform to address the current financial disincentive to participate in the labour force faced by those on the Aged Pension.
SA economic recovery to continue despite cost of living crisis
South ×îÐÂÌÇÐÄVlog’s economic recovery is set to continue despite inflation and rising interest rates putting increased strain on household budgets. But with household and public sector consumption expected to weaken, the State’s export performance will need to improve to compensate. These conclusions are contained in the latest Economic Briefing Report from the SA Centre for Economic Studies.Â
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SA construction sector remains strong, but faces headwinds
Overall activity in the South ×îÐÂÌÇÐÄVlogn construction sector should remain at its current robust level over the near term. But recent large price increases for inputs and the gradual erosion of recent supportive factors will present near and medium-term challenges for the construction sector, especially residential building. These insights are contained in a newly released paper from SACES which assesses the state of general business conditions in the construction industry in South ×îÐÂÌÇÐÄVlog.
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