For instance, even though third-quarter gross domestic product (GDP) growth fell well short of economists’ expectations, the eight economists who’ve updated their forecasts since the numbers were announced still see growth of 2.9% for all of 2014. That’s a substantial six-tenths of a percentage point better than the U.S.

Even so, with investment in the resource sector now past its peak and the sharp declines in global commodities, the country’s economy is expected to lose momentum next year. Bloomberg’s survey of private-sector economists shows that GDP growth is projected to drop to 2.8% before reaccelerating to 3.2% in 2016.

But since the resource sector is a huge part of what’s attracted foreign investors (such as ourselves) to Australia, it’s worth considering which of the country’s other sectors are showing promising signs of growth, at least until the next global commodity supercycle.

In an era of historically low interest rates, the most obvious beneficiaries are the housing market and the industries, such as finance, construction and household goods retailing, that have the most exposure to housing.

Still, as we wrote last month, Australia’s policymakers have been fretting over the possibility of a housing bubble for at least a year. And with the Reserve Bank of Australia (RBA) now widely expected to lower rates early next year (the country’s short-term cash rate has been stuck at 2.5% since August 2013), the country’s banking regulator is poised to rein in risky lending so that the central bank can cut rates without further stoking the real estate market.

The Australian Prudential Regulation Authority’s (APRA) measures include tighter controls on loans to real estate investors as well as ensuring that first-time borrowers aren’t taking on too much debt.

But one thing is clear: The RBA and its fellow regulators hope to deflate the bubble without causing an implosion.

Of course, if the central bank does lower rates once more—a majority of traders are betting on a cut of at least a quarter point by April, according to Bloomberg—then prospective borrowers who aren’t being targeted by APRA could still end up pushing home prices even higher.

Regardless, too much risk exists in the sector at this point, and that makes us uncomfortable. We’d rather look for opportunities elsewhere.

Priced to Sell

Thanks to the declining currency, one area that could emerge as a contender in the months ahead is Australia’s manufacturing sector.

In addition to the real estate market, RBA Governor Glenn Stevens has also been focused on the country’s exchange rate. In fact, one of the primary aims of the central bank’s current rate-cutting cycle has been to push the Australian dollar lower.

And this point has been repeatedly emphasized in Steven’s monthly statements. Earlier this month he said: “The Australian dollar remains above most estimates of its fundamental value,” he said, particularly how much commodity prices have dropped in recent months.

During the commodities boom, Australia’s abundance of resources helped fuel the perception that the country’s currency is backed by hard assets. The Australian dollar’s ascendance—it peaked at $1.10 in mid-2011—helped attract capital, including from U.S. investors such as ourselves, who saw both gains and income from dividends enhanced by currency appreciation.

At the same time, a higher exchange rate has been disastrous for Australian companies that do significant business overseas and found their products and services were at a disadvantage to those offered by countries with weaker currencies.

And as. Stevens noted, the currency remained strong far longer than the fundamentals would have suggested, confounding economists and policymakers alike. “A lower exchange rate is likely to be needed to achieve balanced growth in the economy,” he’s repeatedly said.

To that end,. Stevens and his deputies have not been above trying to talk the currency down in their public statements. Such efforts have rarely achieved a lasting effect, though perhaps the steady drip of such comments over time does account for at least some depreciation in the dollar.

Based on past remarks, we had previously assumed the central bank was targeting an exchange rate somewhere between USD0.80 and USD0.85—the aussie currently trades just below USD0.83, its lowest level since mid-2010.

But last Thursday, in an interview with The Australian Financial Review, Mr. Stevens said he now believes that the exchange rate should be in the vicinity of USD0.75, a level at which the currency hasn’t traded for a sustained period in roughly eight years (excluding the Global Financial Crisis).

That would also represent a fall of nearly 10% from current levels, a dismal prospect in the near term for U.S. investors who are already suffering losses from the downturn in the resource space.

While that’s a huge drop in the world of currency trading, if the RBA lowers rates just as the U.S. Federal Reserve finally starts to raise rates again, then the exchange rate could very well be at that level by the third or fourth quarter of next year.

The Emerging Makers

After four years of largely contracting, in November Australia’s manufacturing sector finally shifted into expansionary mode again, according to the Australian Industry Group’s Performance of Manufacturing Index.

The indicator briefly offered an expansionary blip in July before retreating for three months, so it’s too soon to tell whether this latest reading will prove similarly evanescent. But the sector now has multiple tailwinds, including a depreciating exchange rate, declining commodities prices, and low interest rates that could head even lower.

Areas of particular strength included food and beverages, wood and paper products, textiles, clothing and furniture, and nonmetallic mineral products.

To be sure, some of those areas have considerable exposure to the housing market, which could put them at risk once it deflates. And most manufacturers still lack the confidence to invest in future growth.

Even more promising are the data from the latest Westpac-Australian Chamber of Commerce and Industry industrial trends survey, which suggests the manufacturing sector has actually been expanding for five consecutive quarters, helped by residential construction and a rise in services investment.

But manufacturers are still waiting for greater signs of a resurgence in the sector, as recent gains have yet to translate into business investment or increased hiring.

We’ve been waiting for one of the non-mining sectors to take over leadership of the country’s economy. But it still looks like we’ll have to wait a bit longer.