These are observations of  factors I think will change the Australian market in 2011.  Other short-term factors will come into play that could change any or all of these factors. I predict these with great trepidation as I have heard only a fool predicts the future of any economy but it was fun exercise to think about. I am not an economist or financial expert by any stretch of the imagination but I would be interested in hearing your own conclusions via comments or damian@damianholmes.com
– Continuing high Australian Dollar against all major currencies
– Housing prices are high and afford-ability is low
– Interest rates will continue to rise and those with fixed mortgages will be going into a flexible rate of 7.5-8.0%
– Private debt will continue to rise as housing prices stay high and people redraw against already high loans to do home improvements
– Universities increased fees although they expect lower overseas enrollments
– Australian Government changed immigration laws for overseas students
– Continued contraction in Tourism as local and international tourism rates drop
– Continued growth in WA & Queensland due to mining; Other states will need to start spending on capital projects to get things moving as the 2008 Federal stimulus has finally dried up.
– Competition in industries are stagnant along with competition as M&A continues the only option for many companies to be able to grow and gain talent – how Singapore Exchange takeover of ASX is key along with how the government deals with increased interest from Chinese companies increasing investing in overseas markets in 2011.
– China is Australia’s largest export market
– 2 speed economy will continue as Mining sector outstrips any other sector and retail & tourism drops off
– Lower than expected retail numbers for Christmas and sales moving retail overseas moving overseas due to price gouging by retailers and high Australian dollar having effects on part-time & full time retail staff.
– Talent will be in short supply as more baby-boomers retire and along with a lack of middle managers to rise up the ranks as many where sacrificed in 2007-’08 to cut companies costs to keep the market & stockholders happy