return to risk taking in financial markets, potential owners of real capital in the developed economies have not yet been prepared to step forward in significant numbers and take a risk. consumer demand has been soft and businesses have wanted to wait and to see what happens. they have felt more comfortable leaving their money in bank accounts earning very low rates of interest, rather than taking the chance and investing in new capital. this change in corporate attitudes is, i suspect, one of the enduring but underappreciated consequences of the financial crisis. at the aggregate level, the australian economy has been shielded from its effects by developments in the resources sector, but some areas of the economy are clearly feeling the impact. finally, a fourth factor that has had an effect on the overall level of investment in australia is the change in household spending behaviour. unlike in earlier years, growth in household consumption is no longer running ahead of growth in household income. the step - down in the rate of growth of retail spending in particular has reduced pressure on capacity and affected rents for retail properties. there has also been some reassessment of the appropriate model of retailing. the result can be seen in the abs ’ s estimates of total investment in the retail industry which, as a share of gdp, is at the lowest level for many bis central bankers ’ speeches years ( graph 7 ). the abs data also suggest that there has been some flow - on effects to investment in the wholesaling industry, which is also at quite a low level. so, in summary, the high exchange rate, uncertainty, risk aversion and the changes in household spending behaviour have all weighed on non - mining investment over recent times. as a result, non - mining investment has made little contribution to growth in the overall economy ( graph 8 ). this is at a time when mining investment is no longer increasing, with the mining boom transitioning from one based on investment to one based on production. as best we can tell, mining investment declined over the past year, while net exports rose strongly due to lower capital imports and the higher production of bulk commodities made possible by the earlier investment. looking forward so having looked back at what has happened so far, i would now like to look forward. over the period ahead, the level of mining investment is likely to decline substantially as existing projects are completed. the exact profile remains difficult to determine, but it would not be surprising if mining investment, relative to gdp, declined by 3 percentage points or more

to watch borrowing, in particular, very carefully. the main point here, though, is that we expect consumption growth to strengthen as households become more comfortable with their balance sheet positions. assisting with this, disposable income is expected to grow more strongly over the next couple of years than it has over the past couple of years. housing prices are also now rising, not falling, and a pick - up in residential construction activity is in prospect. the unemployment rate is also expected to decline, which should give people the confidence to spend. so it is reasonable to expect that things improve from here, although it is hard to be precise about how much longer this period of balance sheet adjustment will continue. the fires, the drought and the coronavirus outbreak other issues that we have examined carefully in putting together the forecasts are the devastating bushfires over the summer and the drought. on behalf of the reserve bank board and staff i would like to extend our thoughts to all those who have been affected, especially to those who have so tragically lost loved ones. i would also like to extend our deep gratitude to all those who have worked so tirelessly to control the fires. the economic impact of the fires in the areas affected is very large. there have been very significant disruptions to normal activity in these areas and there has been large - scale destruction of homes, farms and businesses as well as public infrastructure. in assessing the impact of this on the australian economy as a whole we have taken into account that there will be a material rebuilding effort and that government grants and insurance payments will assist many people. on this basis, our assessment is that gdp growth for 2020 as a whole will be largely unaffected. there is, however, likely to be a noticeable effect across the december quarter last year and the current quarter. while it is still difficult to be precise, we estimate that the effects of the bushfires will reduce gdp growth by around 0. 2 percentage points across the two quarters. we are also continuing to assess the effects of the drought on the economy. farm output declined by 16 per cent between 2017 and 2019, and farm exports fell by 13 per cent. a further decline of around 10 per cent in farm output is expected in 2020, representing a drag on gdp growth of around a quarter of a percentage point. this is a stark reminder that the economic effects of these climate events are material. a new uncertainty affecting the outlook is the outbreak of the coronavirus. it is too early to tell what the