GDP progress eases in September

Australia’s GDP elevated by a modest 0.2% within the September quarter, based on the newest 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 improve, progress has decelerated all through 2023.

“Authorities spending and capital funding had been the principle 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 further funds for childcare, aged care and pharmaceutical merchandise,” Keenan stated.

Protection spending additionally contributed, significantly as a result of 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 targeted on transport, communication, and utilities initiatives. Personal engineering development additionally noticed an increase, pushed by elevated funding within the mining business.

Stock modifications and commerce impression

Change in inventories contributed 0.4 proportion factors to general progress in September, in distinction to a 1.2 proportion level detraction within the June quarter. A notable shift in export dynamics, significantly falling costs for coal and LNG, impacted mining inventories and led to a decline within the phrases of commerce.

Challenges in commerce and providers

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

Elevated journey providers imports, up by 19.5%, mirrored Australians touring abroad throughout the Northern Hemisphere summer time. Nonetheless, exports of journey providers continued to recuperate 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 Girls’s World Cup, and schooling exports experiencing a notable improve as a result of 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 providers.

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