In an economic update, HSBC Global Research said the Australian economy has seen an increase in job growth as a result of a lift in net services exports like education and tourism.
“This is clearly a positive development and means that commodity prices and China's investment cycle may be less important for Australia's growth outlook,” the update said.
The update argued that Australia’s rebalancing is likely to broaden. The economy will continue to be supported by a rising demand from Asia – particularly middle-class China – for Australian services.
According to HSBC, Australia's net services exports are now a 0.5 percentage point contributor to GDP. Further, without the sector's contribution, GDP growth would be over one percentage point slower than it is at present, the update stated.
“The lift in net services exports is also likely to be contributing significantly more to jobs growth than the decline in mining investment is subtracting. After all, over 80 per cent of the jobs in Australia are in the services sectors.
“China's investment cycle may now be a bit less important to Australia as its growth prospects are becoming much more tied to the financial health of the Asian consumer and their willingness (and ability) to buy Australian services and assets,” the update said.
HSBC concluded that the level of the Australian dollar (AUD) versus the renminbi remains an important driver of Australia’s growth.
“A lower AUD would help to further support growth and may be needed to get growth back to trend, while any appreciation would clearly weigh on local growth prospects,” the update said.
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