The paper "How Strong is Australia’ s Economy" is a wonderful example of an assignment on the economy. The Australian economy reflects a lop-sided growth pattern, which has been exhibited for some time. The economic conditions reflect the combined impact of the strong dollar, mining investment boom, a period of weak productivity growth for the last ten years, continuing risks in the worldwide economy associated with the global financial crisis fallout as the global activity center shifts from the west to the East. Also, the structural changes in the spending patterns of Australian households, a weak spot in the local commercial and residential construction cycles, and a reduction in investment and operational spending by the Australian state and federal governments.
By international standards, the Australian economy is doing relatively well. The rate of unemployment is also lower compared to other AAA countries (Carmignani, 2013). On the other hand, inflation is higher compared to other countries like the United States and the United Kingdom; however, it is less than 3%. The country's current account balance has deteriorated owing to increasing mining-related imports, increasing investments in the resource sector, progressive normalization of interest rates, and terms of trade on external borrowing.
The Australian Prime Minister, Kevin Rudd noted that Australia has “ among the lowest of budget deficits and debt to GDP of any other major economies in the developed world” (Carmignani, 2013, par. 1). The value of goods and services that Australia produces was 2.6% higher than the second quarter in 2012. The consumer-spending rate increased by 0.4% in 2013 whereas the personal saving rate was at a high of 10.8% (Cole, 2013).
The persisting high exchange rate as well as still weak assurance is preventing materialization of new growth factors. The labor market has eased with the rate of unemployment hovering at about 5.5per cent until April 2013, while inflation remained low at 2.2 percent in early 2013 (OECD, 2013). The business is affected by development in other countries, foreign currency fluctuations, and other global forces. IBisWorld (2013) report showed that the revenues from the industry are expected to reduce by 3.3% per annum; this has resulted from increased competition from international footwear manufacturers. The industry has been facing increased competition both externally and internally.
In spite of the high competition, the industry also faces low barriers to entry. Various indirect factors discourage and promote entry to the industry, for example, high-end imported men shoes discourage local shoe wholesalers and retailers. Globalization has led companies to outsource production overseas. Currently, it is hard to find low-cost footwear producers in Australia (IBISWorld, 2013). The continued negative impact of the global recession has had a major impact on the Australian economy and this has in turn reduced the consumer spending power.
According to Marks (2013), trade liberalization has played a major role in globalizing the footwear industry through re-orienting production to the international market from the domestic market. As a result, output has reduced in the domestic market while expanding in the later market. Such global forces have led to a decline in footwear employment in Australia. The footwear industry is labor-intensive and there are unique labor relation issues. It is a large source of direct employment as well as an important customer source for a wide variety of Australia raw material and is an important consumer for providers, and middle suppliers of technical, trade, and professional services.
The industry had promoted a very vibrant retail sector through facilitating just-in-time retailing transactions and making sure that there exists a flexible supply of high demand footwear for customers where there is askew retail forecasts of timing, preferences, and consumer demand. Various initiatives encourage respect for labor rights in the footwear industry and bring together different groups that consist of trade unions, companies, NGOs, and universities to implements codes of conduct that endeavor to protect the rights of the workers.
The legal rights of waged employees and employment conditions are essential to fulfilling fundamental human rights and key issues for gender equality and development and global poverty reduction. The footwear industry has experienced an escalating use of footwear components to significantly gain from low labor cost countries whilst exercising control over the assembly and control of the end products.
Carmignani, F. (2013). Comment: How strong is Australia’s economy. Retrieved from
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Cole, W. (2013). Australian economy marks 22years of growth in Q2. Reuters. Retrieved from
IBISWorld (2013). Footwear Manufacturing in Australia: Market Research Report. ANZSIC C1352.
Marks, A. (2013). The globalization of the Australian textile, clothing, footwear, and motor vehicle industries: results in line with other western market economies. Global Economy Journal, 13(1), 129-150
OECD (2013). OECD economic outlook. Vol. 2013/1. OECD Publishing.