Mining investment has a bit further to fall, but by our estimates about 80 per cent of the adjustment is now behind us. Resource exports still have further to grow. Meanwhile, growth of activity in the non-mining sector has risen gradually over recent years. That improvement has been fostered by low interest rates and the depreciation of the exchange rate since 2013.
Growth of non-mining economic activity is expected to be around average over the next two years. One notable aspect of our latest forecasts was the upward revision to the outlook for Australia’s terms of trade. Prices of bulk commodities have risen this year and contributed to a rise in the terms of trade of about 6 per cent in the June and September quarters.