Is the Mining Boom Causing a Surge in New Cafes?

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New Restaurants & Cafes are emerging everywhereFOR SOME time now, the RBA has been as assuring us of the flow-on benefits soon to reach the non-mining states of Victoria and New South Wales.

However, these benefits may not be very easy to recognise. And so, let’s attempt to make things a little clearer.

The mining boom has been keeping the Australian dollar high for some time now, due to the record levels reached by our terms of trade.

Accordingly, the prices you and I pay for a whole host of manufactured goods have barely altered from what we paid for them 10 years ago. And in some cases, they have fallen.

Yet household incomes have actually grown by more than 60%,
over the same period.

Therefore, with stable prices for many items, together with increased disposable income … this has meant those of us living in Sydney and Melbourne now have more to spend upon services and entertainment.

And that then probably helps to explain the extraordinary explosion in restaurants and cafes, over the last few years — which was covered in some detail, as part of an earlier article.

Are there other Signs of Growth?

The latest ANZ jobs survey showed advertisements rose by 1% during March — and have risen by some 12% for the year.

If next month’s figures show a further increase in job ads … this will provide clear evidence of a return of confidence, within the economy.

Record Savings are sit to re-enter the marketBottom Line: Another recent article touched on the current high level of accumulated household savings.

These are poised ready to re-enter the economy, as soon as this growing confidence is finally confirmed.

And if the RBA trims the cash rate (as is widely predicted to occur in May) … be prepared for a sudden surge in investment activity — which will inevitably include Commercial property.

 

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