Australia’s Economy: Signs of Recovery, Lessons for America

Economic Growth Fuels Business Reputations and Investor Confidence

MelbourneAre you looking up, when you should be looking “down-under”? Let me explain. You know how the weather can change – cloudy one day, sunny the next? There are signs that Australia’s economy may have weathered the worst, but do not expect to hear the forecast call for a return to complete economic-recovery sunshine, just yet.

But it does appear the clouds are passing. There are hints of blue sky ahead. Here are some ways to tell. Business journalists get accomplished at reading between the lines…and so should you. Why? What you learn is of interest to your CEO. The economic weather “down under” is very much linked to worldwide economic conditions. In short, Australia’s economic forecast is watched closely by U.S. business and investors, alike. What happens in Australia, does not stay in Australia. What happens is vital to America.

Question? Are economic experts beginning to use words to describe the economy of Australia, such as “bottoming, flattening, stabilizing?”

Answer: “Yes.” Are big real estate firms seeing any increase in sales in their residential business? According to Lend Lease: “Yes.” And how is consumer sentiment? That means, what are you thinking and feeling about the economy ahead?

The National Australia Business Bank monthly business survey shows improvement in its index of business conditions. Optimism is showing itself. But the economy does not go from cloudy to sunshine in one month. Bottoming is a process.

Still, any improvement is another sign that the process of moving from “totally cloudy” to “partly sunny” may be underway. Finally, here is an important indicator: the stock market. Stocks typically move up before other economic indicators.

Stock Market

After its March low, the market gained about 17 percent. Market participants reacted positively to what they see coming for Australia’s economy. That not only makes consumers “feel” better, but also industry, too, as balance sheets improve.

“Yes,” the market may pullback. A pullback is actually a healthy thing after such a strong move up. As long as the March 9 low stays the low, then you now know that there are a number of positive hints about the economic conditions ahead.

And you now know that when the world, including America and Wall Street, sees conditions looking UP “down-under,” it’s also anticipating an improving global forecast. Economies and investors are geographically connected.

Note to America: Look “down-under” to see if the economy is looking up. Not only that, communicate what you see throughout your organization.

Good economic weather does wonders for the reputation of and confidence in business, Wall Street and investments worldwide. Economic growth is superb public relations, works magic on corporate reputations and fuels stakeholder confidence.

Your CEO already knows this. So should you, your PR and marketing firms, and key stakeholders. Economic trends somewhere “else” are important, wherever you look.

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