In a bid to kick-start the economy, the government is offering tax cut sweeteners to 10 million Australians and the Reserve Bank has cut interest rates – twice this year.
But will it be enough?
Both measures might be a boost to household incomes, but it won’t be enough to lift the economy, according to industry research firm IBISWorld.
“Unfortunately, the government investment planned over the coming financial year is insufficient to stimulate productivity,” said IBISWorld senior industry analyst Tom Youl.
The tax cuts are intended to stimulate spending – but as households feel the effects of poor wage growth, the money is likely to go into the savings jar instead.
But it’s not all bad news for everyone. In fact, in an economic downturn, there are some particular industries that see their goods and services rise in demand.
So if you work in these five industries, according to IBISWorld, you’ll likely be safe from a recession:
1. Debt collection
Rather bleakly, a struggling economy is a “significant opportunity” for the debt collection industry, Youl said; someone needs to collect the debt payments from individuals and businesses that haven’t met their loan obligations.
In mid-June, RBA head of financial stability Jonathan Kearns said that the rate of mortgage arrears were at its highest level since the global financial crisis. Revenue for the debt collection industry is expected to rise by 3 per cent in 2019-20.
2. Temporary staff services
In times of economic uncertainty, businesses need more flexibility as they find themselves needing downsize their staff numbers in order to be profitable.
“Short-term contractors become a more attractive option than permanent employees,” Youl noted.
Enter the temporary staff services industry, which supplies short-term staff to clients on a fee or contract basis and work on the clients’ work sites yet are still legally employed by the temp staff provider.
IBISWorld anticipates revenue in the temporary staff services sector will increase by 4.1 per cent this financial year.
3. Antique and used good retailers
Organisations like Cash Converters and the Salvation Army historically do well in tough economic times.
“As consumers sentiment weakens, households divert spending to cheaper used items rather than purchasing more expensive new products,” Youl said.
“In addition, as unemployment rises, consumers are more likely to sell off assets to cover their expenses, increasing the supply of goods for firms in the antique and used goods retailing industry.”
Revenue in this sector is expected to enjoy 2.7 per cent growth in 2019-20.
4. Furniture, appliance and equipment rental
This industry – which provides household and white goods, like fridges and washing machines, is counter-cyclical, which means it performs better when the economy is doing worse.
Consumers are less prepared to commit to large or pricey purchases, and instead opt to rent basic amenities until economic conditions look better, according to Youl.
This sector is slated to grow by 1.9 per cent this financial year.
5. University, higher education
In a workforce that is already experiencing seismic shifts thanks to automation and AI that makes it quicker, easier and cheaper for some tasks to be performed by robots instead of people, a struggling economy also means employers are cutting existing jobs and aren’t creating any new ones.
As a result, people are naturally looking to up-skill and educate themselves in order to stay competitive in the workplace.
But the university and other higher education industry typically fares well, regardless of economic performance, with this sector set to grow by 4 per cent in 2019-20.
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