How will the US Economy Affect Australia?

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There has been much written over the past few weeks about the likely fallout from what’s been occurring in the United States. And some economists even feel it might be on the brink of recession.

The week, their Federal Reserve sought to address the immediate affects of the housing slump and the sub-prime crisis — by reducing US interest rates by 50 basis points.

In the Spring eBulletin, I propose taking a closer look at the ballooning US deficit; the growing impact “Platform” companies are having upon global economies (including Australia); and how this will affect you as an investor in Commercial property.

US EconomyBut if you take a broader look at the where things stand in the US, you’ll realise that a recession is unlikely.

Rather, these recent AFR graphs would tend to suggest that you are merely seeing a mid-cycle pause in the US economy — which should quickly move back on track, following the latest action by the Federal Reserve.

h3. What about Australia?

Strong OZ Economy
The National Australia Bank August survey indicates strong business expectations, with little impact anticipated from recent events in the US.

The Dunn & Bradstreet Survey tells much the same story — with sales growth for the December quarter at its “highest level in three years”, and profit growth “the best in two years”.

As you know, the Australian economy has withstood several global shocks over the past 20 years; and, therefore, it is unlikely to be affected by this current instability overseas.

Right now, the Commercial property market remains buoyant; and you should see it continue that way for the next couple of years.

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