The document provides an economic outlook and analysis from Craig James, Chief Economist at CommSec. It summarizes that the world economy is okay but Australia lacks momentum. Key points are that interest rates will remain low, boosting housing and spending, while the job market risks remain if confidence and wages do not improve. The outlook forecasts moderate economic growth and inflation, with unemployment slowly decreasing and interest rates staying steady.

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2. Craig James, Chief Economist, @CommSec
March 2015

3. Important Information
3
This presentation has been prepared without taking account of the objectives,
financial situation or needs of any particular individual. Before acting on the
information in this seminar, you should consider its appropriateness to your
circumstances and, if necessary, seek appropriate professional advice.
Commonwealth Securities Limited ABN 60 067 254 399
AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of
Commonwealth Bank of Australia ABN 48 123 123 124 and a Participant of the
ASX Group.
Examples used in this presentation are for illustrative purposes only.

4. 4
The Big Picture
 Deflation/disinflation
 Technology game changer
 Negative interest rates
 Fragile confidence
 Australia lacks momentum

5. 5
World economy OK

6. 6
Australia
In Short
 Could do better
SoWhat?
 Job market risks
 Rates to stay low
 Kinder budget

7. 7
3
1
7
4
8
5
1
+
-
Unemployment
Population growth
The Northern Territory shares the
top spot of the best performing
economies with NSW.
NT
+
-
Queensland is the fifth strongest
economy but lags on unemployment
and housing starts.
QLD
Unemployment
Business investment
+
-
NSW shares the top spot of the best
performing economies with Northern
Territory. Home building is strong.
NSW
Construction work
Retail spending
+
-
The ACT economy is now the sixth
best performing economy,
supported by housing finance but
constrained by a soft job market.
ACT
Unemployment
Housing finance
6
+
-
Tasmania remains at the bottom of
the economic performance table.
TAS
Various
Unemployment
+
-
Victoria is the fourth strongest
economy, and is second ranked on
population growth and housing
finance.
VIC
Equipment spending
Home lending
+
-
South Australia is the seventh
strongest economy but is third
ranked on population growth.
SA
Retail spending
Population growth
+
-
Western Australia has slipped to the
third best performing economy in the
nation with mining construction fading.
WA
Business investment
Home lending

8. 8
In Short
 Not keen to spend, invest
or employ
So What?
 Risk averse
 Cost control
 Strong competition
 Step up marketing
Missing ingredient: confidence

9. 9
But still spending

10. 10
More homes built & bought
In Short
 Firmer housing market
SoWhat?
 Positive for building trades
 Positive for retailers
 Need to follow cycle

11. 11
Rising wealth
Higher home & share prices boost wealth
Stronger building lifts incomes in raft of industries

12. 12
Job market to improve?

13. 13
The good & not so good
Petrol is single biggest weekly purchase
Wages just covering inflation, pressure on budgets

14. 14
Interest rates
In Short
 Rates to stay low
So What?
 Boosts housing
 Boosts spending
 Investment choice
 Fixed vs variable

15. 15
Interest rates

16. 16
Exchange rates
In Short
 Aussie dollar up & down
So What?
 Impact travellers
 Impact on costs
 Foreign vs domestic
 Boost for business

17. 17
Opportunities & Risks
Opportunities
 Wealth is rising
 Housing-dependent areas
to do well
 Tame Budget
 Interest rates to stay low
Risks
 Economy not growing fast
enough
 Rising unemployment
 No lift in confidence
 Scant real wage growth

18. 18
Outlook
FORECASTS
end 2015end 2014
2.75-3.25%2.5%Economic Growth
2.25-2.75%2.4%Underlying inflation
5.75-6.25%6.1%Unemployment
end 2015mid 2015
2.00-2.25%2.00-2.25%Cash rate
6,100-6,3005,900-6,100Sharemarket (All Ords)
US70-77cUS71-78cAustralian dollar