Boston, MA -- (SBWIRE) -- 09/24/2013 -- We are forecasting the slowdown private consumption to be the main drag on Australian growth in the coming quarters, as job losses rise on the back of businesses cutting costs, triggering the beginning of household debt deleveraging. In line with our expectations for the Australian economy to struggle in 2013, real GDP growth in the first quarter of 2013 slowed to 2.2% quarter-on-quarter (q-o-q) in seasonally adjusted annualised terms, compared to 2.3% in Q4 2012. Together with our expectations for tepid export growth, we maintain our expectations for Australia's GDP growth to slow to 2.1% in 2013 compared with consensus expectations of 2.6% and 3.7% growth in 2012.

With China continuing to face its own slowdown in domestic demand, Australia's export growth is likely to remain tepid, despite the weakening Australian dollar. The impact of this on the Australian freight industry will be detrimental and presents downside risk going forward. With the ongoing economic uncertainty in the eurozone and little increase in US demand for Australian exports, we do not expect a rise in externally driven demand to outweigh the decline in domestic demand. As such, we maintain our outlook for GDP growth to slow to 2.1% in 2013, sharply down from the rate of 3.7% recorded in 2012. Indeed, we expect the debt deleveraging and economic restructuring processes to keep economic growth below the country's long-term average of 3.4% for the next decade.

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The Australian freight mix is witnessing something of a lull at present with the airfreight sector set to be the outperformer this year with a creditable 3.37% year-on-year (y-o-y) rise in tonnage throughput. However, both the rail and road freight sectors are forecast to endure a less than impressive 12 months (0.18% and 1.08% annual growth respectively). Ongoing investment in the freight industry will, however, temper any concerns over the medium term.

Headline Industry Data

- 2013 air freight tonnage is expected to grow by 3.37%.
- 2013 rail freight tonnage is forecast to grow by 0.18%.
- 2013 Port of Melbourne tonnage throughput is forecast to increase by 3.00%.
- 2013 Port of Sydney tonnage throughput is forecast to grow by 0.43%.
- 2013 road freight is forecast to increase by 1.08%.
- 2013 total real trade growth is forecast to grow by 1.72%.

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