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Strategies & Market Trends : BAK - Investing

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From: RalphR	5/23/2012 1:54:18 AM
	1 Recommendation of 3249

Re: Short? We had been talking about who gets real sick if China slows down. Australia is still looking good for that. ------------------------------------------------------------------- online.wsj.com Australia's national slogan could easily be "No worries, mate." Its people are rested and joyful and the happiest in the developed world, according to a survey from the Organization for Economic Cooperation and Development. Perhaps that's because they're not working as hard as most of their OECD counterparts. Australians are currently benefiting from a resources boom. That is driving gross domestic product growth at an enviable clip that contrasts with most other developed countries. No wonder Australians are happy—at least they're not Spanish or Greek. But complacency should be a concern. When it comes to labor productivity growth, Australia ranks among the worst performers of the 34-country OECD, its most recent data show. Only Iceland and Greece rank lower. HSBC says productivity growth of around 0.8% a year over the past decade is "very weak" and unlikely to improve substantially because the mining boom masks the need for reform. While Australians are joyful, there are plenty of businesses operating in the country that are more morose. The mining boom has inflated the value of the dollar and that's hurting the retail and manufacturing sectors. House prices are also under pressure. Even in the mining sector, cracks are beginning to appear. High costs—partly because of rising salaries—are a factor forcing executives at resource companies to rethink multi-billion dollar projects. Meanwhile, strike action over scheduling and job security at some mines is already costing BHP and Mitsubishi thousands of tons of lost coal production. The strength of the resources sector has been Australia's security blanket, providing jobs and growth—maybe even happiness—at a time when the global economy has stagnated. But concerns about China's and Europe's health are also weighing on commodities prices. By the time the next happiness survey comes around, Australia's mood may have soured.

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