• Global equity and commodity markets exhibited increased volatility in the past month, caused by heightened geopolitical tensions in Ukraine, adverse weather events in the US and news of a slowing Chinese economy.
• December quarter GDP result for Australia was close to trend, but capital expenditure expectations portend a sharp fall in mining investments by 2014-15.
• As such, jobless growth is expected to continue through 2014 in Australia, with unemployment rate still to reach 6½% by end-2014 when a final rate cut is predicted (possibly November).

In Focus – Implications of drought on the agricultural sector

• After two very wet years in 2010 and 2011, extensive drought conditions returned to a significant inland area of eastern Australia since late 2012. The dryness worsened over the course of 2013, with 80% of Queensland now declared drought-affected, the most widespread in history.
• Severe and prolonged drought conditions have forced livestock farmers to offload their stocks for slaughter and crop farmers to reduce their summer crop, and potentially winter crop plantings.
• Average farm cash income disparity has widened sharply in 2013-14, with grain-intensive farms in WA earning around 8 times more than cattle-intensive farms in Queensland.

For further analysis download the full report.

• Rural Commodities Wrap – March 2014 (PDF, 336KB)