Australia's economy is far from a recession and its outlook has improved, poised to attract international buyers, according to two major investment firms. 
Stephen Roberts, chief economist at Sydney-based Altair Asset Management, said the local economy was faring better compared with most of the world, with global growth set to remain stagnant at 2.8 per cent in 2016. 
"There is more reason for international investors to carefully trawl Australian opportunities and not to sell, but to buy, especially after the underperformance of the Australian sharemarket over recent months," he wrote in a client note.  
Mr Roberts listed four signs, albeit tentative, that investors should be encouraged by: the depreciating currency, the housing boom correcting rather than collapsing, the changing mix of the big banks' loan books and strong employment numbers. 
"The combination of these four positive factors means that the risk of Australia slipping in to recession has lessened over the past month or so from a near 50 per cent chance to under 30 per cent in our view," he said.

1. Currency
The depreciating Aussie, which has fallen 25 per cent against the US dollar in two years and 16 per cent on a trade weighted basis was doing its job in lowering export prices while boosting tourism. 

2. Housing
Housing, meanwhile, had turned from a predominantly speculative investment market to a more stable owner-occupier market, meaning macro-prudential policy was working, Mr Roberts said. 
"That does not mean that house prices will not fall, but it does imply that the fall is likely to be much less than if investors driven entirely by unrealistic expectations of capital gain had continued to be far the most dominant influence in the market," he said.

3. Banks' loan mix
The big four banks had managed to raise the capital required by the Australian Prudential Regulatory Authority without too much market disruption, and their loan books were shifting to more diversified mix of risk in both home and commercial lending. 

4. Jobs growth
Finally, employment growth, which posted very strong numbers in   October and sent unemployment back to 5.9 per cent should prop up retail spending and housing demand.
Underpinning the unknowns was the fact that the Reserve Bank of Australia had room to ease if necessary, Mr Roberts said.
The optimistic note came as Olga Bitel, economist for Chicago-based fund manager William Blair said Australia was beating its Organisation for Economic Co-operation and Development peers in capitalising on China's economic transition. 

China
While many Australians were disheartened by falling iron ore prices, which are caught in a global commodity rout amid weaker demand from China, exports of services have almost caught up with resources. 
"We are talking about medical services, pharmaceuticals, tourism, education - all of these sectors are seeing a tremendous boost [in demand from China]," Ms Bitel told Fairfax Media on a visit to Australia.  
"The resources boom was a big tax on the economy, it made the exchange rate very expensive and the services sector very uncompetitive," she said.
In a further blow to the resources sector,  the OECD on Wednesday struck an historic agreement to scale back coal production. 
But the numbers coming from China's growing demand for services were extraordinary, Ms Bitel said.
Services consumption had risen from 45 per cent of China's gross domestic product to 50 per cent in five years, while retail sales were rapidly growing. Online shopping, almost non-existent a decade ago, was growing at a pace of around 40 per cent a year and accounted for 10 per cent of China's economy. 
She said the legacy from China's manufacturing boom was that it knew how to build roads and bridges, it was not as good as Australia at building hospitals and nursing homes - for which there was a skyrocketing demand. 
This meant that investor portfolios tilted at China should look very different to what they did a decade ago, she said, indicating less resources, and more healthcare and agriculture stocks.