{"id":2176,"date":"2012-08-17T05:50:46","date_gmt":"2012-08-17T09:50:46","guid":{"rendered":"https:\/\/dev.epictranslations.com\/?p=2176"},"modified":"2012-08-17T05:50:46","modified_gmt":"2012-08-17T09:50:46","slug":"beyond-the-boom-australias-productivity-imperative","status":"publish","type":"post","link":"https:\/\/dev.epictranslations.com\/por\/beyond-the-boom-australias-productivity-imperative\/","title":{"rendered":"Beyond the boom: Australia’s productivity imperative"},"content":{"rendered":"

Australia has been riding the wave of Asia\u2019s economic growth, supplying coal, iron ore, and minerals to meet unprecedented demand in China and other emerging markets. As commodity prices spiked in recent years, the country has attracted a flood of investment into its mines, processing plants, pipelines, and ports. More money has been invested in Australian resource projects in the past 5 years than in the previous 20.<\/p>\n

Asia\u2019s economic and demographic trends point to sustained demand in the decades ahead, but growth fuelled by demand for natural resources carries risk. The McKinsey Global Institute (MGI) report\u00a0Beyond the boom: Australia\u2019s productivity imperative<\/em>\u00a0finds that \u201cone-off\u201d factors\u2014including favorable terms of trade and an investment surge\u2014have driven half of the country\u2019s recent growth, obscuring the truth about its overall economic health.<\/p>\n

The magnitude of Australia\u2019s resource boom belies some weakening fundamentals. Since 2005, the country has enjoyed 4.1 percent annual gains in income. But growth in labor productivity has fallen to just 0.3 percent. Capital productivity is now the biggest drag on income growth.<\/p>\n

MGI outlines four potential scenarios for the future and finds that growth is likely to slow down, even in the best possible outcome. But in the worst-case scenario\u2014if terms of trade move back toward their long-term average, some capital projects stall, and productivity growth remains low\u2014income growth could stagnate at just 0.5 percent a year until 2017.<\/p>\n

Australia can\u2019t control commodity prices and global demand for resources, but by reversing its slide in productivity, it can take steps to create a softer landing when the boom eventually subsides. The report identifies four sectors\u2014defined by their proximity to the resource boom and their exposure to trade competition\u2014and pinpoints the major challenges for each of them. Successfully addressing these areas could raise national income by up to AU $90 billion (about US $95 billion) a year by 2017.<\/p>\n