This is a figure set by the Reserve Bank of Australia (RBA) each month, which will influence monetary movements and in turn, guide the economy.
For the month of March, the RBA elected to keep the cash rate at the historical low of 2 per cent for the ninth month in a row – a result that wasn’t really a surprise to anyone. Let’s examine why the board made this decision and how it correlates with reports on other sectors.
Where mining left off
Many of the driving factors cited by Reserve Bank Governor Glenn Stevens have remained the same over the past few months.
Again, the decline of the country’s mining industry continues to play a pivotal role in the rate decision, affecting many other sectors in the economy. Data from the Australian Bureau of Statistics (ABS) reveals that the value of engineering work in Western Australia and Queensland was $21.66 billion in September 2013. By March 2015, this figure was $14.83 billion, falling considerably as mining operations lost steam.
With this in mind, interest rates have been low, encouraging new businesses to start up and allowing existing ones to flourish. This is intended to increase business diversity in the country, pushing other industries to pick up the slack left behind by the mining industry.
Fortunately, low interest rates have indeed driven economic growth – something that will continue in light of the ‘no change’ decision by the RBA. According to ABS figures, Australia’s work force increased by 19,800 to a total of almost 12 million workers in the month of January alone. Simultaneously, unemployment was reduced by 4,400 people, dropping the rate to 5.8 per cent.
So in which areas did the economy grow specifically? One of them is the architecture and design industry, which according to Seek Learning, experienced whopping job growth of 62 per cent, with the average salary of an interior designer growing to $76,203.
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