Household income will most likely rise quite solidly, which should underpin consumption even if households maintain their recent higher rate of savings. Most importantly, however, we think that economic growth will be driven by strong business investment. This will be concentrated in the mining and gas industries, including some large projects that are planned here in Queensland.
Mining investment typically runs at about 1¾ per cent of GDP, and in past mining booms it has reached up to 3 per cent of GDP (Graph 11). In the current boom, it has already risen to 4¼ per cent and, even on conservative assumptions, is expected to rise significantly in the years ahead. That will provide a major impetus to growth.