Australia might sell itself as a country of beaches, mines and paddocks but the economic reality is starkly different with the vast majority of economic activity in the Australian economy in the service sector.
It’s our biggest employer and, as we saw this week with the release of the AiG Performance of Services Index, it is a sector that is getting back into expansion territory.
In keeping with this improving outlook, Coles announced yesterday that it plans to embark on a $1.1 billion supermarket investment program and employ another 16,000 people over the next three years.
Importantly in the context of the RBA wanting the construction workers freed up from the mining investment boom to be redeployed through out the economy, Coles says that 8200 of the 16,000 jobs it will create will be in construction.
Sure they may not be permanent, but that’s the nature of construction – once it’s built you move on to the next job.
As we noted earlier, this is just another sign that Australia might have turned an economic corner and may be making the transition to more balanced growth the RBA is looking for more easily than previously thought.
Watch out for Australian Retail Sales today at 11.30am.