inevitably a degree of imprecision in the estimates, this increase in lng exports is expected to boost gdp growth by an average of around ¾ percentage point in each of 2016 and 2017. through this third phase of the mining boom, the economy overall has been growing at an annual rate of between 2 and 2½ per cent ( graph 7 ). the quarterly readings for gdp continue to be affected by fluctuations in mining production due to the weather. but looking through this volatility, the data for the june quarter suggest that the economy is continuing to grow at a similar rate to that of the past few years. most other recent indicators are also consistent with a moderate expansion in the australian economy. measures of business conditions have improved and most are now above average. the unemployment rate has been little changed over the past year and the demand for labour has increased, with a rise in employment relative to the working - age population. the housing cycle remains in an upswing and household consumption is growing moderately ( graph 8 ). for many in the community, the fact that growth is occurring at only a moderate pace is disappointing. growth has been slower than we had become used to, and slower, i think, than we are capable of. and, in terms of our incomes, this has been compounded by the decline in prices of resource exports. as a result, there has been very little growth in our real income per capita for some years now, after a decade and a half of very strong growth. while this disappointment is understandable, we should not lose sight of the fact that our economy has shown considerable ability to adjust, and to do so in a way that has preserved both overall economic and financial stability. we have adjusted to the upside of a huge positive international demand shock without overheating and we are now adjusting to the downside while still managing to grow at a moderate rate. this is a significant achievement and is a testimony to the underlying flexibility of our economy. this flexibility should give us come confidence about the future. an important element of this flexibility is the exchange rate ( graph 9 ). when the terms of trade initially started to fall and the decline in mining investment was clearly in sight, the exchange rate was relatively slow to adjust. on a number of occasions, the rba drew attention to this. but the exchange rate has now adjusted considerably and this adjustment has continued over recent weeks. just as the appreciation helped stabilise the economy in the upswing of the boom in commodity

of the reversal, on the back of the very good work done by our regional liaison people, especially here in perth. as a result, we've been much better at forecasting investment in the resources sector than in the other industries. that's because of the help we were given by the large players in the resources industry. i know that many of you have participated in these discussions, which have been extremely helpful in understanding the nature of the episode. so i want to thank you for helping in that way. as it happens, about the time the board was meeting here in 2011, resource prices and australia's terms of trade were about at their peak. and what a peak it was. on a ten - year average basis, the terms of trade exceeded anything seen for at least a century. this was not just a very brief spike like some commodity price events have been ( such as the early 1950s rise in the price of wool ). it was quite persistent. not permanent, but quite persistent. nonetheless, the peak was four years ago. since then, as you know, prices have fallen considerably. today the price of iron ore is about us $ 40 per tonne, and coking coal around us $ 75. at a national level, australia's terms of trade, having been through an extraordinary surge, have fallen by a third and are still declining. bis central bankers ’ speeches but even at those reduced prices, iron ore is still bringing a price 60 per cent higher than it did in 2000. natural gas prices are 50 per cent or more above their 2000 level. the terms of trade, though down a long way from the peak, are still nearly 30 per cent higher than their 20th century average. of course they may yet fall further. time will tell. in the meantime, many resource companies are making significant strides in reducing their production costs so as to remain viable, and in some cases still very profitable, at these reduced prices. that's consistent with most experience in the long history of the resources business. australia's presence in these markets is greater now. it would be true to say that, though weaker demand is part of the story, a significant part of the fall in prices is a result of increased supply from this continent. the ‘ super - cycle ’ in commodity prices, and the associated surge in capital spending, have been of national and international significance. at times, the price of iron ore has even, on occasion, displaced from page one