Australian business leaders are predicting that the Australian economy will expand at its fastest pace since the early 2000s this year, with the country forecast to grow at an annual rate of 3.6%.
But it won’t be easy to achieve this growth, analysts have warned.
The key issues are a shortage of workers, a lack of investment, and a lack in infrastructure to support the economy, the Australian Bureau of Statistics said in a report released on Tuesday.
“Australia is not growing fast enough to meet the growing needs of the country,” said economist Michael Williamson of the Australian National University.
“Our economic outlook is deteriorating.
We need to think very differently about how we’re going to achieve growth.”
A key concern is a shortage in labour force, with almost one-quarter of the population aged under 25.
“A lack of labour force participation is one of our key challenges, particularly in the age group 25-34,” Williamson said.
“The labour force is ageing, but it is also growing at a faster rate than many other sectors.”
The ABS report also noted that Australia has a strong economic pipeline.
“We have a large, diversified export market,” Williamson added.
“And we have the ability to tap into a number of key infrastructure sources to help our economy grow.”
A number of the nation’s biggest banks are already planning to move their headquarters to Australia in the next five years, with a number more expected to follow.
But many companies are also concerned about the long-term impact of a lacklustre economy.
“If we’re not doing something about this, then I’m going to start wondering whether I can actually be successful as a CEO,” said one chief executive at one of Australia’s biggest firms, according to the ABC.
The country’s manufacturing sector is also one of its biggest challenges, with many small businesses struggling to make ends meet and the number of manufacturing jobs falling.
“Manufacturing is a huge part of our economy, but we are seeing a lot of people losing their jobs and that’s not good for our economy,” said a senior Australian industry official.
“There’s a lot more to be done to create jobs for Australians, to create opportunities for young people and also to help create a more sustainable economy.”
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