Australia's once-booming resources sector is fizzling, but HSBC says a new engine may propel the economy: housing and infrastructure.
"The time now appears right for a renewed focus on urban infrastructure," HSBC said in a report this week. "Such activity should help to support Australia's great re-balancing act and employment growth at a time when labor and construction costs are easing as the mining boom ends."
Sales and service income in Australia's mining industry, a key growth driver in recent years, decreased 7.5 percent between 2012/13 and 2011/12, government data show, dragged by cooling demand from China, falling metals prices and sector-wide cost-cutting measures.
In its 2014 budget, the Australian government pledged to spend A$50 billion over seven years to "deliver vital transport infrastructure".
An incentive program was also included to motivate state governments to privatize mature assets in order to raise sufficient funds for new infrastructure.
So far, a handful of privatization/recycling plans have been formally put in train under the scheme, the most prominent being the proposed lease for the Port of Melbourne.