There’s a growing concern among analysts and economists that resource-rich Australia could tumble into recession this year, and it’s really starting to show in some parts of the country.
Specifically, the industrial suburb of Broadmeadows on the outskirts of Melbourne claims a 27 per cent unemployment rate, Bloomberg reported.
Overall, Australia’s unemployment rate is 6.4 per cent, but across the country, there are pockets with unemployment rates higher 10 per cent. Industrial areas are notably bad (and they’re also seeing an uptick in crime — in Broadmeadows, burglaries averaged one in every 32 homes, Bloomberg reported.)
The reason? During Australia’s ten-year mining boom, driven by Chinese demand for raw materials like iron ore, manufacturing districts like Broadmeadows saw none of the benefits and were stuck, instead, dealing with an overvalued currency.
Now the whole country could start to suffer as Chinese demand wanes.
But the Reserve Bank of Australia, which cut rates last month for the first time in more than a year, insists the only thing that’s too low in Australia right now is confidence.