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.