The Reserve Bank of Australia's (RBA) decision to cut interest rates this week is great news for the long downtrodden non-mining sectors of the economy. The RBA is effectively acknowledging that the mining boom will start petering out by late next year and the economy will need a few new growth drivers to take its place.
Indeed, the RBA’s intentions seemed pretty clear from its post-meeting policy statement. The RBA acknowledged “the peak in resource investment is likely to occur next year, and may be at a lower level than earlier expected. As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.”
Investing in housing
Where better to look than the non-mining sectors, and interest rate sensitive sectors such as housing construction in particular.