Impact of Inflation on Australian Industrial Sector

Running head: Impact of Inflation on Australian Industrial Sector
Impact of Inflation on Australian Industrial Sector
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Impact of Inflation on Australian Industrial Sector1
Abstract
The following research proposal aims to provide an outline of the study, which is on the
impact of inflation on Australian industrial sectors. The research objective is to provide
evidence of a relationship between inflation and industrial development. With the help of
secondary data from authentic and reliable sources, the research aims to prove the strong
correlation between the two major factors in the Australian economy. The data is expected to
be appropriately related to theories, empirical findings, and represent the entire report
logically. In addition to this, the paper expects to incorporate reliable graphs, charts and
tables to enhance credibility.

Impact of Inflation on Australian Industrial Sector2
Table of Contents
1. Introduction............................................................................................................................3
1.1. Problem Statement..........................................................................................................3
1.2. Objective and aim of the research...................................................................................6
1.3. Research Questions.........................................................................................................6
2. Justification and output of the project....................................................................................7
3. Conceptual Framework..........................................................................................................8
4. Research Hypothesis..............................................................................................................9
5. Research Methodology.........................................................................................................10
5.1. Method of collecting data..............................................................................................10
5.2. Data analysis strategy....................................................................................................11
5.3. Budget and ethical considerations.................................................................................11
6. Organisation of the study.....................................................................................................12
References................................................................................................................................13

Impact of Inflation on Australian Industrial Sector3
1. Introduction
For decades, Australia has been witnessing a stable and relatively low rate of
inflation. Since 1993, the targeted rate of inflation in Australia was set at 2.5 percent by the
Reserve Bank of Australia (Abs.gov.au, 2016). This low rate of inflation is an effect of the
reduction in the rate of exchange in the country. Apart from this, the historically high rate of
inflation instigated the government to reduce the inflation rate. As a result, the inflationary
shock and rapid economic expansion plan lead to a constant fall in the inflation rate. The
Australian inflation rate tends to affect the industrial sector of the country. The current rate of
inflation in Australia is about 1.9 percent (Tradingeconomics.com, 2020).
The agricultural industry and mining industry recorded stable rates of growth. On the
other hand, the manufacturing sector and property market are negatively affected by the
lower rate of inflation. Between 2016 to 2017, the manufacturing and mining sector recorded
a fall in employment, whereas the rate of employment in the agricultural sector increased
during the same year (Abs.gov.au, 2017). In contrast to this, the sales and income of service
increased in agriculture and mining. However, there is a fall in the sales and service income
for the manufacturing sector. Soon after the further fall in the inflation rate, the industry
dynamics changed in the year 2018. The agriculture sector experienced a fall in the growth
rate. On the other hand, the mining, construction and manufacturing sector fared well with a
stronger rate of growth.
All these factors and low-income growth are related to a lower rate of inflation.
Therefore, this paper will try to gather evidence for the exact effect of inflation over the
growth and fall of the industrial sector of Australia. The research will include a secondary
analysis of data from different sources.
1.1. Problem Statement