Seven Group stays cautious and can wait to see if the RBA adjusts its inflation goal. Delivering the present goal in an surroundings following document expansionary insurance policies is just not achievable with out materials financial ache. In our view, the goal is outdated and under long-term averages. We count on we might want to handle a interval of upper inflation and that focus on stays a very powerful challenge for the RBA to think about.

Matt Comyn, Commonwealth Financial institution

The economic system will proceed to sluggish in 2023 because the impression of already introduced will increase within the money price proceed to move via. By the second quarter, roughly 70 per cent of the impression on family money flows could have been felt, with this rising to roughly 90 per cent by the tip of 2023 as extra fixed-rate mortgage phrases expire.

The impression of rising costs and rising charges will proceed to be inconsistently felt. We’re monitoring a variety of indicators, together with spend patterns, sentiment, financial savings buffers, employment, wages, and stress in our portfolio, to supply an image of the combination and localised efficiency of the economic system.

The RBA may be very conscious of the danger of overtightening. We really feel far more optimistic concerning the outlook for our home economic system in comparison with many different components of the world, such because the US, Europe or the UK.

Jeanne Johns, Incitec Pivot

The Australian economic system has grown considerably over a lot of the second half of 2022, albeit some early indicators of slowing are beginning to seem. All the symptoms are that Australia’s financial development general is about to sluggish in 2023.

General, document commodity costs and a continued demand for labour will make it troublesome for the RBA’s rate of interest hikes to regulate inflation.

There are two elements that might sluggish the economic system additional: the impression of the worldwide economic system, and the impression of excessive pure gasoline costs and electrical energy within the home market, which is putting our industrial base in danger.

As a rustic with excessive power costs, we threat hollowing out Australian manufacturing and exporting our jobs to international locations with reasonably priced power.

Mike Henry, BHP

Mike Henry has been chief government of BHP for nearly three years. 

We count on exterior uncertainty within the yr forward, from financial slowdown in superior economies, to geopolitical tensions, inflationary pressures, tight labour markets, provide chain constraints and, in fact, COVID-19.

We threat holding ourselves again if we don’t deal with globally uncompetitive fiscal settings, falling productiveness and training ranges, and rising inflation and expertise shortages. On the nationwide stage, the primacy of enterprise bargaining needs to be protected and mining excluded from multi-employer bargaining, whereas in Queensland, the unplanned royalty improve needs to be repealed.

Australia’s greatest shot at long-term financial success is to pursue an aggressive development agenda constructed on a extra diversified economic system. The problem for Australia is that we’re not seeing new industries emerge to diversify and strengthen the nationwide economic system to the extent or on the tempo required to maintain transferring the economic system ahead. We want development throughout all sectors and in new companies to broaden and deepen Australia’s financial base.

On price range forecasts, we proceed to notice that the technical assumptions on commodity costs are fairly pessimistic as near-term targets. Overly conservative views on commodity costs feed into the phrases of commerce and nominal GDP, that are key for income.

Mark Fitzgibbon, NIB Group

I’m anticipating inflation to ease as power costs ease, manufacturing recovers and provide chains open up. I’ll be shocked if we don’t obtain no less than 1.5 per cent development. I believe inflation is extra about price push than demand pull, so blunting demand with greater rates of interest will solely achieve this a lot.

Darren Steinberg, Dexus

Regardless of the Australian economic system being higher positioned than most different economies, we’re taking a cautious strategy to 2023. We imagine Australia’s financial state of affairs will worsen earlier than it will get higher, and are targeted on lowering gearing and positioning ourselves for a troublesome 2023.

Ross McEwan, NAB

The economic system has been extremely resilient this yr, with enterprise circumstances remaining properly above its long-run common. There’s little doubt there are headwinds for households and for the economic system typically as we enter subsequent yr, and we count on this may see the economic system document GDP development of slightly below 1 per cent in 2023 and unemployment to rise to round 4.2 per cent.

I believe for many individuals this may really feel like a major slowdown, however we’ll nonetheless see development and Australia may be very well-positioned to handle via elevated inflation and better rates of interest in comparison with different international locations, and so are the overwhelming majority of our prospects.

Robert Spurway, GrainCorp

Regardless of the uncertainty of upper inflation and cost-of-living pressures, tight labour markets and unstable power costs, I stay optimistic concerning the outlook for the Australian economic system.

Australia produces assets, meals and power that the world wants, and now we have an enviable monitor document of resilience. Forecasting isn’t a simple activity, however the RBA have the benefit of a robust place to begin and alternative to look at the impression of price rises and financial response in abroad markets, the place disruption and inflationary stress began sooner than in Australia.

Jayne Hrdlicka, Virgin Australia

It’s troublesome to foretell how 2023 will pan out given the varied elements at play. Whereas shopper sentiment surveys and main indices proceed to level in direction of weak financial development, I don’t imagine that can be felt evenly throughout the economic system.

For instance, in aviation, ahead bookings from each enterprise and leisure company stay extraordinarily sturdy. This isn’t stunning given what now we have all been via in the course of the worst of our COVID lockdowns. Whereas shopper spending could tighten in some areas, journey and leisure is prone to stay extra resilient in private budgeting.

Vik Bansal, Boral

Vik Bansal of Boral.  

Australia is just not alone in feeling the pressures of worldwide inflation, rising rates of interest, hovering power prices and provide chain disruptions. These robust circumstances will proceed into 2023, and whereas we’re displaying some early indicators of resilience, I believe it’s probably our economic system will proceed to face substantial headwinds into subsequent yr.

Graham Chipchase, Brambles

From our international perspective, Australia has carried out higher than comparable economies and proven nice resilience. Whereas it’s unclear if Australia can keep away from a technical recession, I believe it heads into this stage of the financial cycle with some benefits. After all, a world financial downturn gained’t hit all sectors and industries equally. We all know shopper staples maintain up comparatively properly via recessions, which advantages companies like ours.

Peter King, Westpac

We count on development to sluggish, however that’s essential to get inflation beneath management. Our economics workforce predicts GDP development will sluggish to round 1 per cent.

We expect the impacts can be uneven. One factor I watch intently is unemployment. It should probably rise over the approaching yr, with our workforce predicting 4.5 per cent, however even then, it could nonetheless be at historic ranges.

The vital factor is prospects are typically in good condition, however the full impression of the rate of interest rises gained’t be felt till the brand new yr. The financial institution is in place to assist prospects get via a few of the challenges that the present surroundings is producing.

Alexis George, AMP

Whereas we count on the economic system will proceed to sluggish into subsequent yr, our home view is that we’ll narrowly keep away from a recession. Our economists count on GDP development will sluggish from round 3 per cent this yr to round 1.5 per cent subsequent yr, which is according to the federal price range forecast. We imagine shopper spending would be the principal driver of the slowdown, with individuals more and more feeling the pinch from greater rates of interest and cost-of-living pressures.

We don’t count on a recession, regardless of the danger of aggressive tightening by the RBA and international central banks. General, whereas we see development slowing, a few of the extra optimistic drivers are that the enterprise funding outlook is strong, the Australian greenback is prone to fall if the worldwide economic system will get too weak, immigration is rebounding, inflation could also be much less of an issue domestically, and the RBA seems to be just a little extra cautious on price hikes.

Rob Scott, Wesfarmers

Wesfarmers chief government Rob Scott.  Brook Mitchell

I believe 2023 is prone to be a more difficult yr for the Australian economic system given the impression of elevated inflation, rising rates of interest and the danger of a slowdown in main international economies. Value-of-living pressures, mixed with rising prices of doing enterprise, are prone to have an effect on demand in 2023. Nonetheless, Australia is ranging from a robust base, with low unemployment and gathered financial savings, which gives some capability to navigate harder circumstances.

Australia is just not proof against the dangers of a US or European recession or a slowdown in China. Mixed with geopolitical dangers, I subsequently see the dangers internationally as being key ones to observe within the yr forward.

I see industrial relations as an rising threat in 2023 for the Australian economic system, with multi-employer bargaining reforms being applied including complexity to labour markets, on the identical time the economic system is slowing down. There are different IR reforms that needs to be prioritised that may assist wage development, participation and productiveness resembling award simplification, however these don’t appear to be priorities.

Amanda Lacaze, Lynas

The economic system has been remarkably resilient in current occasions, and it seems that many shoppers retain spending energy probably primarily based on the rise in financial savings via the pandemic.

For Lynas, the extra vital points relate to the potential financial impact of current and potential coverage modifications on the mining business. There are a selection of insurance policies being prosecuted which have the potential to create vital disruption and price inflation … together with the IR laws and dialogue of elevated taxation. Lynas is investing over $1 billion within the Goldfields area in Western Australia, and we’re seeing vital price escalation on these main tasks.

Lynas sells all product into international markets and … demand for uncommon earth supplies stay sturdy, and sectors resembling electrical automobiles and wind power are rising.

Steve Vamos, Xero

All companies are working in a posh surroundings, and it’s exhausting to see that altering in 2023. Xero’s knowledge exhibits Australian small companies are adjusting to the present macroeconomic surroundings, reporting wage and jobs development from this time final yr, however they’re nonetheless going through challenges in accessing expertise, and financial uncertainty stays.

Shayne Elliott, ANZ

After the previous couple of years, it’s positively troublesome to foretell what the following few will appear to be.

This yr we’ve seen a lot of challenges emerge throughout the financial surroundings, with rising inflation and modifications to rates of interest. That is impacting completely different sectors and components of society in several methods. Enhancing productiveness will assist to alleviate these pressures and each authorities and business have to concentrate on innovate to drive development and stay aggressive. We’ve heard from our international prospects that the price of doing enterprise in Australia may be excessive, so we have to guarantee there are insurance policies in place that assist present certainty and in flip improve funding each nationally and internationally.

Marnie Baker, Bendigo & Adelaide Financial institution

As 2023 approaches, a mixture of rising inflationary pressures, rising rates of interest and wages, a decent jobs market and common international uncertainty, means the financial outlook stays complicated, difficult and in flux.

The financial institution expects tightening to proceed till inflation is contained. This can be difficult for households, companies and the property market, nevertheless, it’s excellent news for depositors and self-funded retirees who’ve needed to make do with low returns on their deposits.

The Australian economic system stays an financial outperformer primarily based on a variety of metrics, together with GDP development, a 50-year-low unemployment price, a major commerce surplus, and a comparatively low web debt-to-GDP ratio.

Nonetheless, within the brief time period, our major problem can be a slowing in financial development because the impression of rising inflation and better pursuits are felt.

Kelly Bayer Rosmarin, Optus

Optus chief government Kelly Bayer Rosmarin. Louie Douvis

I’m an optimist and see the advantages from extra immigrants arriving into Australia, elevated journey, and the innovation that outcomes from the revival in face-to-face collaboration. I imagine that the response and creativity of Australians and our companies could shock us with upside.

David Koczkar, Medibank

There are ample challenges for an economic system with low development, excessive rates of interest and excessive inflation. Whenever you mix this with unpredictability within the international economic system, the danger will increase.

Whether or not it hits forecast or not, it’s clear that households can be beneath some stress. That’s why we’re targeted on delivering extra alternative, worth and management to our prospects and doing our bit to take some stress off their hip pocket.

Damien Nicks, AGL Power

We’re in an fascinating state of affairs the place unemployment is structurally so low that even when the economic system slows, it’s unlikely we’ll see unemployment rise too steeply, and subsequently it’s unlikely we’ll see the key employment-related points which have occurred in prior slowdowns.

It will likely be vital to additionally hold an eye fixed out to make sure that labour escalation doesn’t get uncontrolled when and if the economic system slows and ranges out.

The labour market continues to be difficult. That is significantly evident in sectors resembling expertise and with regard to the technical expertise required in our business.

Mike Sneesby, 9 Leisure Co

There isn’t a doubt that inflationary pressures and rising rates of interest will impression shopper spending. It’s affordable to count on that this may move via to promoting markets as consumer-facing companies take into consideration their advertising and marketing methods and advertising and marketing expenditure.

Elliott Rusanow, Scentre Group

We count on the Australian economic system to proceed its strong efficiency into 2023, underpinned by the well being of the patron. Unemployment stays low, financial savings ranges are wholesome and nonetheless rising, and wage development and immigration are each selecting up. As an economic system, Australia enters 2023 in strong well being.

We’re on monitor to finish the best variety of leasing offers this calendar yr since Scentre Group was established in 2014, which is a really sturdy endorsement for the arrogance our enterprise companions have within the Australian and New Zealand economies.

Alastair Symington, Blackmores

We count on that the Australian economic system will carry out higher than different economies within the area heading into 2023 because the tight labour market will drive up wages and elevated demand continues into the primary half of the yr. The priority is that we see inflation proceed to rise, resulting in additional rate of interest will increase into subsequent yr.

Paul Perreault, CSL

CSL CEO Paul Perreault. Eamon Gallagher

I believe 2023 is shaping up as a pivotal yr for the worldwide economic system, and Australia isn’t any completely different. Increased rates of interest ought to begin to impression inflation, and there’ll probably be stress on home demand which ought to begin to normalise. Robust international demand for Australia’s pure assets ought to considerably offset this, so we imagine 1.5 per cent development is an affordable forecast.

Whether or not the headline development price slows just a little under this forecast or not, we agree that the tempo of financial development will sluggish from the buoyant, above-trend tempo of CY22. That is one thing we put together for.

Susan Lloyd-Hurwitz, Mirvac

Mirvac chief government Susan Lloyd-Hurwitz  Janie Barrett

We expect Australia may be very well-placed in comparison with different international jurisdictions. And whereas we put together to navigate short-term cyclical pressures, we’re very aware that the place to begin of the economic system is robust. For instance, each unemployment and underemployment are on the lowest stage in many years, and each households and companies have constructed up sound capital buffers. Rates of interest, whereas rising, stay low by historic requirements.

Equally, we’re aware that longer-term structural drivers are nonetheless in play. We see provide/demand imbalances changing into extra pronounced within the residential sector, abroad migration returning to pre-pandemic ranges rapidly – boosting development in main cities – and the exponential development of accountable funding capital of current years persevering with its upward climb.

Frank Calabria, Origin Power

The Australian economic system has been remarkably resilient within the face of worldwide financial challenges, largely due to the energy of our exports. There’s now a nice balancing act, with fiscal and financial levers needing to be executed successfully in a rising inflationary surroundings, with a slowdown looming for a lot of of our buying and selling companions.

Steve Donohue, Endeavour Group

There’s a whole lot of hypothesis about what 2023 will deliver for the Australian economic system, and clearly there are nonetheless a whole lot of unknowns. Whereas we all know it would take a while for the total impression of inflation and rising rates of interest to have an effect on households and spending, going into the festive season we’re nonetheless seeing plenty of exercise. Because of this, it’s exhausting to see the economic system slowing greater than what has been forecast, but when the final couple of years have taught us something, it’s that we should be ready for something.

Adam Watson, APA Group

There’s all the time rather a lot to be optimistic about, however clearly there are some apparent uncertainties that may proceed to lurk into 2023, together with inflation, rate of interest pressures, and ongoing shocks from the battle in Ukraine.

In Australia, we come from an underlying place of privilege, with comparatively excessive dwelling requirements and low unemployment, however we are able to’t grow to be complacent and lose sight of the necessity to concentrate on our susceptible communities.

When it comes to what may be performed inside power given this heightened international uncertainty, we have to guarantee as a nation that we proceed to speculate, not solely in renewables, however in home gasoline provide to maintain power costs low and guarantee we retain power safety, and to speed up the decarbonisation of our power system.

Vicki Brady, Telstra

It’s clearly a time of nice uncertainty. I gained’t add to that, besides to say that from our perspective, telecommunications and the very important connectivity it gives is changing into increasingly more vital.

That’s vital for Telstra as demand for our services and products has by no means been greater. It’s additionally vital for the economic system – not solely is it serving to our prospects and the nation extra broadly grow to be extra environment friendly and increase productiveness – connectivity mixed with expertise advances are additionally serving to us reply to a few of our greatest challenges, like local weather change and international inequalities.