A business forecaster says the ACT economy is continuing to duck and weave to avoid the federal government's bullets of budget restraint.
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In the June quarter 2016 business outlook, Deloitte Access Economics says the good news for Canberrans is that the greater the gridlock on Capital Hill, the greater protection for the ACT economy.
"Gridlock is a dirty word, but not if you live in the national capital. The inability of the government to try for hard decisions, and the inability of the Senate to follow through on what did reach it, means the ACT's economy has been protected from harsher cutbacks.
"And so Australia's cliff-hanger federal election result looks likely to be a shield of steel around the ACT's economy in the short term," the report's authors said.
Commonwealth cutbacks have made a dent though, because total employment in the ACT today is the same as it was at the start of 2014. And the risk of future budget repair remains real.
If China's economy falters, then there's a risk the Australian government responds not with stimulus but with austerity, Deloitte Access says.
"And, in the less likely event that a violent outbreak of bipartisanship takes hold up on [Capital] Hill – taking wing alongside some flying pigs – then that would suggest the chill winds of earlier cutbacks could lie in the forecaster's crystal ball," say the report's authors.
For now the ACT economy is generating reasonable growth, helped by low interest rates which are driving a huge mortgage belt.
Housing construction in the ACT has rebounded strongly in the latest data, and indications are it will continue.
Canberra house prices recorded a moderate increase and rental vacancy rates have fallen from their recent peaks. Although the rents charged to tenants continue to show a fall over the past year, that fall has been gradually easing since mid-2015.
"Similarly low interest rates have combined with (1) the replacement of homes knocked down because they had asbestos in them; and (2) an acceleration in the pace of land release to generate some good news in housing construction."
Earnings from educating foreign students have climbed fast, and the territory is investing in that sector as a result, with new student accommodation at the ANU.
Deloitte Access says commercial construction looks healthy with about $1.5 billion of definite projects matched by another $1.6 billion in planned projects.
Big-ticket items are the $800 million Manuka Oval redevelopment, and $600 million research and business precinct between ANU and the city.
