- GDP = private consumption (C) + gross investment (I) + government spending (G) + (exports − imports) (X-M)
- Or, simply expressed as:
- GDP = C + I + G + (X - M)
There has been a moderate upturn in the construction of dwellings, but there is much improvement still hoped for.
Of course, the whole point of construction of the resources mega-projects is to ramp up exports (X), and a huge volume of minerals is going to be exported from Australia over the coming decade. The risk is that although mining companies attempt to lock in robust cashflows by maintaining forward hedge books, ultimately the dollar value of exports will be closely tied to the strength of commodity prices. The forthcoming deluge of ore will naturally increase supply dramatically, so it is vital for Australia that demand remains high, particularly from China.