Commodity slump: Not bad news for everyone

As resource industries start to feel the pinch of lower prices, a lower dollar softens the blow ... especially for the best companies.

Summary: The falling oil price is likely to weigh on LNG profits, while iron ore is likely to stay in a bear market for some time, meaning tax revenue from resources is set to fall. But a rise in US interest rates will push the Australian dollar lower and cushion the blow of the fall in mining revenue. Salaries are increasing at a lower rate as companies look harder at productivity.

Key take out: Companies that will do well in this environment are those that begin to devote more time to strategic long-term growth decisions.

Key beneficiaries: General Investors. Category: Economics and investment strategy.


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