Mining decline could result in 'soft period' of three years
THE economic slowdown after the mining boom could last for three years as the nation struggles to pick up the slack in other sectors, a leading business researcher has forecast.
The BIS Shrapnel long-term forecast for 2015-30 said the "soft period" following the boom would likely rebound to a five-year period of solid growth, which would be propelled by a fall in the Australian dollar and subsequent boost to exports.
The forecast said growth in the June quarter might have been in negative territory and could "spark talk of a recession".
BIS Shrapnel associate director of economics Richard Robinson said the next three years would be tough for parts of the economy as the country made the required structural shifts.
He said if growth had gone backwards in the June quarter - this was yet to be confirmed by official government figures - it would be a "blip on the radar".
Despite forecast falls in net exports for the last quarter, Mr Robinson said the situation would turn around on the back of consumer demand, non-residential building and public engineering work.
"That said, net exports will be a key driver of growth over the medium term," he said.
The key driver of a recovery from the mining slowdown, which he said was only just beginning, would be a lower Australian dollar to help non-mining exporters.
Mr Robinson said after a decade in the doldrums, tourism would make up for lost ground and be a key player in the nation's fortunes.
"The strength of tourism will drive regional growth as we feed, clothe, house, entertain and transport tourists, with a corresponding flow-on to the rest of the economy - just as we experienced during the mining boom," he said.