GDP beats expectations but WA lags
The Australian economy has continued its record-breaking expansion, expanding by 0.5 per cent in the three months to the end of June.
The Australian Bureau of Statistics said over the past year the economy had grown by 3.1 per cent.
The result was slightly better than expected, pushing up the Australian dollar.
It now marks 23 years since Australia was last in recession. Between the June quarter of 1991 and the same quarter this year, the Australian economy has grown by 113 per cent.
Treasurer Joe Hockey said he was confident there was significant momentum in the economy despite the latest slim growth reading.
The treasurer said they were a “pleasing set of numbers” but there was no room for complacency with growth still below trend and the unemployment rate rising.
He said the figures were consistent with overall improvement in consumer and business confidence.
“Certainly the June quarter national accounts indicate that there is real and building momentum in the Australian economy,” he told reporters in Canberra.
Commonwealth Securities economist Savanth Sebastian said despite all the doom and gloom about the winding back of mining investment, fiscal contraction and horror stories about the collapse of the manufacturing sector it was pretty clear that the economy was in reasonable shape.
“Certainly in better shape than most other so-called ‘advanced’ economies,” he said.
The quarterly performance was largely driven by a lift in inventories which added 0.9 percentage points. There was also a life in final consumption and private fixed capital formation.
The biggest detractor from growth was net exports which took 0.9 percentage points from the result. Public sector cuts in capital spending took another 0.2 percentage points.
At the industry level, manufacturing was the biggest contributor to growth in the quarter, growing by 2.1 per cent.
Mining was the biggest drag, down by 1.4 per cent and taking 0.2 percentage points from growth.
WA continues to face economic headwinds with State final demand, which excludes exports, falling by 0.3 per cent. It was the third consecutive quarterly fall.
Over the full year, State final demand is down by 1.6 per cent.
The fall is being driven by the drop off in private capital spending led by the mining sector.
There were positive signs on productivity. GDP per hour worked lifted by 0.9 per cent in the quarter to be 2.8 per cent higher over the year.
Productivity in the market sector of the economy improved by 0.7 per cent to be 3.2 per cent higher through 2013-14.
