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In this article we delve into the heart of a recession and answer the question “What does a recession mean for me?”

A recession is more than just a buzzword that gets thrown around by the media.

A recession represents a significant decline in economic activity that can span months, even years. Think of it as the winter of the economic cycle - cold, challenging, but not permanent.

It's often marked by tangible shifts in key economic indicators such as GDP, employment, income, and consumer spending. From high inflation rates to increased consumer debt, reduced spending, or global events like pandemics, various factors can set the stage for a recession.

You might be thinking… “Yeah, but what does a recession actually mean for me”.

A detailed description of exactly what recessions are and how they impact the Australian share market.

When the media starts reporting higher interest rates and spiralling price rises, their next story will almost certainly scream the impending doom of a possible economic recession.

But what exactly is a recession and is it all bad news for local share market investors?

Most commentators believe a ‘technical recession’ occurs when there have been two consecutive quarters of negative growth in real gross domestic production or economic output, but there really is no strict definition. It’s more just a time when unemployment increases and growth falls.

This article discusses who the Baby Boomer generation are and why their exit from the workforce will leave a large impact on the Australian economy.

From psychedelic drugs and the birth of rock and roll in the sixties to the sexual revolution and female equality of the seventies through to the rapid up take of personal computers in the eighties, Australian ‘baby boomers’ have always caused waves. 

Now as they move into retirement, the groovy generation are about to flood our hospitals and age care facilities, beach our economy with falling demand and workforce shortages and dump Government revenue via a sharply reduced tax take.

So, who are these people? 

Fewer Australians: will this create a more sustainable society, or will it cause economic growth to evaporate? This article reviews the latest population growth rates for Australia, compares them to rates in other countries and outlines the arguments as to why this might be a negative or a positive for the domestic economy.

To stem its then soaring population growth rate, which was widely believed to be crippling economic development, China introduced the draconian ‘one child policy’ in 1979 – a move now seen as directly lifting 150 million people out of poverty.

The policy focused global attention on fertility rates around the world. It raised the question of whether strong birth rates enhance economic growth or, in fact, stop countries from reaching their full potential.

This article discusses Australia’s international trade agreements, with a specific focus on China and the recent friction between the two countries. We detail Australia’s reliance on China, the importance of trade as a whole, potential repercussions of a soured trade relationship and whether Australia should be looking to other markets.

In 2007 China displaced Japan as Australia’s largest trading partner. In 2009 it became Australia's largest export market, and in 2017-2018 we sold A$123.3 billion worth of goods and services to China – 30.6% of our total exports. In comparison Japan, still our second most important market, only took 12.7% of our exports.

On the flip side China supplied us with 18% of our imports worth A$71.3 billion. Our total economy, as measured by GDP, was worth around A$1.9 trillion at the time, so our two-way China trade made up about 10% of our economic activity. That may not make us totally reliant on China for our economic health, but any major disruption to that trade means Australia will have many billions of dollars less to run our schools and hospitals, pay pensions and wages, and to maintain our high standard of living.

Discover the latest insights into the economy's slowdown and persistent inflation, compounded by global uncertainties and significant federal budget announcements. We also touch on key developments, including China’s lifting of bans on Australian exports and the upcoming US election.

The economy continues to slow, with inflation remaining sticky, the new federal budget making waves, and global events that may have a significant impact.

Uncertainty at home and abroad

The current outlook indicates uncertainty both domestically and internationally, making it unlikely that inflation will reach the target range of 2-3 per cent in the near future.

May forecasts suggested that inflation would return to the target range by the second half of 2025 and reach the midpoint by 2026. However, recent indicators point to weak economic activity, such as slow GDP growth, an increase in the unemployment rate, sluggish wage growth, and uncertain consumption growth.