Australia’s weakest economic growth in a decade could actually create jobs in surprising areas.
The Reserve Bank of Australia cut interest rates to a new record low of 1% this month in a sign of concern and issued renewed warnings of high debt levels.
As the economy grows at the slowest annual pace since the global financial crisis of 2009, it could be an opportunity for people working in certain sectors, according to industry research firm IBISWorld.
Australia’s weakest economic growth in a decade may actually create jobs in surprising sectors (pictured are customers at a second-hand furniture store).
Senior industry analyst Tom Youl said college professors, those who sell electronics, antique furniture and second-hand goods, and debt collectors would benefit the most.
He made the call as the RBA released a new paper predicting record high household debt in Australia would continue to weigh on consumer spending and threaten the economy.
“This has raised concerns among policymakers that increased household debt is a drag on economic recovery and poses risks to future growth,” read the RBA discussion paper by Fiona Price, Benjamin Beckers and Gianni La Cava.
“High levels of household debt can weigh on spending even when the economy is in a more ‘normal’ part of the business cycle.”
With Australia’s economy in a state of limbo, IBISWorld has set out why certain jobs are in greater demand.
The economy has not been in recession since 1991, but Australia has been in a per capita recession since last year, during which production per capita has fallen.
university teacher
Mr Youl said a slowing economy usually encourages younger people to pursue university studies.
Industry research firm IBISWorld said university lecturers are likely to be in greater demand as younger people enroll in higher education to improve their job prospects
“Job finding can be particularly difficult for students entering the national job market, as companies allocate fewer resources to training and employing graduates,” he said.
“As a result, students are more likely to pursue higher education to improve their employability.”
used goods dealer
Business was also expected to boom at stores selling antique furniture and used goods, such as Cash Converters and the Salvation Army.
“As consumer sentiment weakens, households are redirecting spending towards cheaper used items rather than buying more expensive new products,” Mr Youl said.
“Also, as unemployment rises, consumers are more likely to sell assets to cover their expenses, increasing the supply of goods for businesses in the antique and used goods retail industry.”
Those who have rented electrical equipment
In times of economic uncertainty, furniture and electrical equipment rental companies usually do well.
“As economic uncertainty increases, consumers are becoming more reluctant to make major purchases such as appliances and furniture,” Mr Youl said.
“To preserve wealth, households tend to rent basic amenities until economic conditions improve.”
Business was also expected to boom in stores selling antique furniture and used goods (pictured is an Op store selling second-hand clothes).
A crackdown on payday and personal loans was also expected to help these household goods landlords.
debt collector
Unsurprisingly, collection agencies are more in demand during tough times.
Australian households have some of the highest debts in the developed world, with a debt-to-income ratio of 189 percent.
Since peaking in July 2017, Sydney’s average house price has fallen a record 17.4 percent, leaving many borrowers with more debt than their home was worth.
With the Australian household saving rate set to fall to a record low of 2% in 2020, Mr Youl said a group would be in demand as borrowers struggled to repay their loans.
“If economic growth falters, there could be a significant opportunity for debt collectors,” he said.
