Rodney Dickens of Strategic Risk Analysis Limited shares in this his third installment essential insights for property investors and would-be home owners.
To recap, in the first chapter of the How the Economy Works booklet that is being delivered in installments Rodney revealed the trade secrets of the economic forecasters (see first chapter). This showed that the economic forecasters are no good at predicting “turning points” (i.e. when economic or industry activity changes from tumbling to rising or vice versa). In the second chapter he demonstrated the pivotal role housing activity plays in most economic upturns and downturns. This means that understanding what drives housing market cycles is at the heart of picking turning points in economic growth (see second chapter).
Chapter Three – How economic upturns and downturns unfold
“In this, the third chapter I look at how economic upturns and downturns that start in the housing market filter through the economy, impacting on a wide range of occupations and industries. This is the economic multiplier process of textbook economics. The export sector also plays a part in driving economic upturns and downturns, although it is generally of secondary importance to the role that interest rates and net migration play in driving cycles in economic growth. Issues relevant to the export sector will be discussed in a future chapter.”