Jan 17, 2020

Our Insights

Let’s start out with some good news. 

Although not everyone is convinced, the vast majority of economists are confident that we won’t see a recession in 2020 (we haven’t had one in almost 29 years).

2019 was not a good year for spending - Australians clung to their money and meanwhile the economy remained stagnany. But experts feel that this trend could reverse in 2020, providing the economy with a much-needed boost.

Let’s now go over a few other important areas of the Australian economy to see how they’re expected to perform. 

Cash and the Overall Economy

Economic analysts expect Australian banks to lower the cash rate even further. Wages will have to go up first in order to trigger inflation. The Australian Dollar will likely experience a bit of a drop, but nothing too dramatic. 

In short, our economy isn’t expected to have a stellar performance in 2020 but it remains to be seen how things like cash and employment rates affect the bigger picture. 

Employment

Employment and wage growth have stalled and aren’t expected to improve in 2020. However, recent rate cuts could have a good effect and change the trend. Wages should increase when the unemployment and under employment rates fall. Economists, for the most part, are pretty positive that the wage rate won’t fall any further in 2020.

Property

The property market has a fairly positive outlook for 2020. Prices are continuing to steadily rise in recovery from their last drop. Now may be a good time to get in on the property action, but don’t expect much growth in the larger metropolitan areas.

The First Home Loan Deposit Scheme could help a handful of first-time homebuyers break into the market and give it a boost, but experts are skeptical that it will make any significant difference.

Shares

The shares market is volatile. Currently it looks like the time to buy. But it remains to be seen whether or not that means there will be good returns. If retail and household spending go up as anticipated, then that could have a positive effect on the market.

Events to Keep an Eye On

No one can say with 100% what the future holds, especially when money is involved. But some events that are expected to make waves in the global economy in near future include: 

- Brexit

- US elections

- US - China relations

- Wuhan coronavirus outbreak which originated in China

So be prepared for anything! Based on the current trends, Australia won’t face anything too dramatic. There are some rays of hope, but most areas don’t look like they’ll dramatically improve, so it’ll be a pleasant surprise if they do.

Get Advice

The best way to deal with economic trends and market fluctuations is to work with an experienced financial adviser, and build a diverse, robust wealth plan that will offset the ups and downs. 

It starts with a conversation.

Talk to the team at Calder Wealth Management. Call us on (08) 8373 3333 to schedule your free initial appointment. 

Written by Ben Calder at Calder Wealth Management.