The global economy performed well again in 2018 after the strength seen in 2017. However, as the year progressed the recovery became less synchronised, with growth in the US strengthening further while falling away in most other countries, as the strong US dollar and rising trade tensions undermined activity in some economies.
After exceeding expectations in the first half, the Australian economy also appeared to slow in the second half of 2018. At around 5%, Australia’s unemployment rate is now at the lowest level since 2012. Looking ahead to 2019, we anticipate continued moderate growth, supported by strong public sector demand, business investment and exports. However, the housing sector is emerging as a significant potential risk, particularly should east coast house prices continue falling in 2019 at the same rate as in the past 18 months. Inflation pressures remain muted, suggesting the Reserve Bank of Australia could go another year without lifting interest rates.
Stay informed with our take on the latest investment research concerning global markets
Economic and Market Outlook
After a year of strong global economic growth, can we expect the trend to continue? Read our report on what we predict for markets in these highly unpredictable times.
Themes and Opportunities
What are the forces that will shape economic and market dynamics? We highlight four elements we believe will influence investment decisions over the years ahead.
Navigating through Turbulent Markets
Global equity markets tumbled nearly 13% in the fourth quarter of 2018. Given an outlook of continued global growth, were these falls justified?
Trade Wars 2 - Enter the Dragon
East collides with West in a world of de-globalisation. Is this merely a trade war or a battle for world domination and what are the potential implications for Australia?
Taking Action in 2019
The ideas outlined on this page represent our observations in the current investment environment. We look forward to helping investors adapt their strategies as new risks and opportunities arise over the course of 2019. Please get in touch to speak to a Mercer consultant today.