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Wednesday, February 21, 2024

GDP progress eases in September

Australia’s GDP elevated by a modest 0.2% within the September quarter, in keeping with the most recent ABS figures. This progress, measured in seasonally adjusted, chain quantity phrases, displays a 2.1% growth since September final yr.

Katherine Keenan, head of nationwide accounts at ABS, stated that whereas this marks the eighth consecutive quarterly GDP enhance, progress has decelerated all through 2023.

“Authorities spending and capital funding had been the primary drivers of GDP progress this quarter,” Keenan stated.

Authorities spending boosts progress

Authorities ultimate consumption expenditure elevated by 1.1% this quarter, constructing on a 0.6% rise within the June quarter.

“The expansion in authorities expenditure was pushed by social advantages to households, together with the Vitality Invoice Aid Fund rebates, and additional funds for childcare, aged care and pharmaceutical merchandise,” Keenan stated.

Protection spending additionally contributed, notably resulting from elevated expenditure associated to worldwide coaching workout routines held in Australia.

Funding drives capital formation

Gross mounted capital formation rose by 1.1%, with public companies main the rise at 8.9%. Investments by Commonwealth, state, and territory companies primarily centered on transport, communication, and utilities tasks. Non-public engineering development additionally noticed an increase, pushed by elevated funding within the mining trade.

Stock adjustments and commerce influence

Change in inventories contributed 0.Four share factors to general progress in September, in distinction to a 1.2 share level detraction within the June quarter. A notable shift in export dynamics, notably falling costs for coal and LNG, impacted mining inventories and led to a decline within the phrases of commerce.

Challenges in commerce and companies

Imports of companies rose by 8.4%, surpassing the 1.9% progress in companies exports.

Elevated journey companies imports, up by 19.5%, mirrored Australians touring abroad through the Northern Hemisphere summer time. Nonetheless, exports of journey companies continued to get well post-COVID-19 worldwide border restrictions, up by 4.4%.

ABS famous the surge in tourism exercise in September, with Australia internet hosting the FIFA Ladies’s World Cup, and training exports experiencing a notable enhance resulting from a record-breaking variety of worldwide college students.

Family spending and financial savings

Keenan stated family spending remained flat within the September quarter, affected by authorities advantages and rebates that diminished spending on important companies.

The family saving-to-income ratio fell to 1.1%, its lowest stage since December quarter 2007. Elements contributing to this decline embrace the elimination of the Low and Center Earnings Tax Offset, elevated curiosity paid on dwelling loans, and inflationary stress on households.

Compensation of workers and labour market

The compensation of workers noticed its largest quarterly rise since September 2022, with the superannuation assure fee, the minimal wage, and ongoing tightness within the labour market all contributing to the rise, Keenan stated.

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