Equity Engineer - November 2014 | No Country for New Economy | The current government policy mix continues to support old sectors over new sectors despite...

Equity Engineer - November 2014 | No Country for New Economy | The current government policy mix continues to support old sectors over new sectors despite headwinds like structural decline, weather uncertainties, global trade issues, scalability and limited long term multiplier effect. Tidal wave of unemployment, falling real wages and rising cost of living in the next few years are expected to take a substantial bite out of the local consumer spending. We continue to back old economy engines that will not provide substantial employment improvement, while technology and free trade agreements will further erode our manufacturing capabilities. We struggle to see the recovery path in the current policy mix without an emerging economy delivering another commodity recovery cycle. We continue to expect unemployment to go past 6.5% in 2015 and remain above 6% well into 2016. Despite short term downside risk in the Financial Sector Inquiry and falling commodity prices, long term prospects for Australian equities are very positive baring structural risks like housing bubble. (VIEW LINK)