businessinsider.com – As the resource supplier to the booming emerging markets, Australia enjoyed many years of economic prosperity. But as China’s economy slowed, concerns about Australia’s health mounted. Dylan Grice summed up the concerns when he wrote that Australia is “a credit bubble built on a commodity market built on an even bigger Chinese credit bubble.” Policymakers have been trying to balance the economy away from one led by resource exports to one led more by consumption.
According to the latest Australian Bureau of Statistics report, capital expenditures in the country fell 5.2% quarter-over-quarter in Q4. Manufacturing was in the worst shape followed by mining.
What’s more, fiscal year 2014-2015 (i.e. mid 2014-mid 2015) capital expenditure plans also look “awfully weak,” writes Societe Generale’s Klaus Baader. Fiscal year 2014-15 plans came in “17.4% below the first estimate for 2013/14, which was itself down by 8.8% from the peak in the prior year.”
Not only are we seeing a slowdown in mining, we’re seeing a slowdown in non-mining investment as well.
What’s more? Qantas, Australia’s largest airline announced 5,000 layoffs and posted a huge loss. Overall, it was just a bad day for the Aussies.