In this Issue
Includes revisions and changes to this issue.
The Australian economy expanded by 3.2% in 2006-07. Real net national disposable income grew more strongly than GDP (up 3.9% in 2006-07), reflecting strong growth in the Terms of trade (up 6.7%). The Household saving ratio was 0.8% for the year, up from -0.2% in 2005-06. The index of Market sector (footnote 1) labour productivity increased by 0.4%. The index of Market sector Multifactor productivity (MFP) fell by 0.6% in 2006-07, reflecting a 3.1% increase in Gross value added for the Market sector against an increase of 3.8% in total labour and capital inputs.
Expenditure of GDP
Final consumption expenditure was the major contributor to GDP growth in 2006-07, taking over from Private business investment which was a key driver in 2005-06. Total final consumption expenditure increased 3.8%, and contributed 2.9% to GDP growth. Within household final consumption expenditure, which increased 3.6% and contributed 2.1 percentage points to GDP growth, rent and other dwelling services (up 3.7%) and transport (up 3.8%) were the two largest contributors to growth. Private business investment contributed 1.0 percentage points to GDP growth in 2006-07, with increases in investment in Machinery and equipment, Non-dwelling construction and Alterations and additions.
From an industry perspective, growth over 2006-07 was recorded in most industries including Construction and Communication services (both up 7.8%), Mining (7.6%), Transport and storage (6.0%), Cultural and recreational services (5.4%) and Finance and insurance (5.1%). Manufacturing recorded moderate growth overall of 2.2% but within the industry there was strong growth in Metal products manufacturing which was up 11.7%. Falls were recorded in Agriculture, forestry and fishing (-22.4%) due to the impact of the drought, and Electricity, gas and water supply (-1.2%), driven by a fall of 5.6% in Water supply, sewerage and drainage services.
Income from GDP
In the Income components of GDP in 2006-07, there was strong growth in Compensation of employees of 8.0%, growth in Gross operating surplus (GOS) of Non-financial corporations of 12.1%, growth in GOS of Financial corporations of 9.0% and a 3.0% increase in Gross mixed income.
Prices in the National Accounts
The annual movements for the Chain price indexes for GDP and Domestic final demand were 4.6% and 3.1% respectively. This gap in price movements is mainly caused by changes in prices paid for Imports and the prices received for Exports.
Multifactor productivity (MFP) fell by 0.6% in the market sector in 2006-07. In addition to strong growth in labour input of 2.7%, there was a strong increase in capital services in 2006-07 of 5.1%. Total combined inputs (capital services and labour) grew by 3.8% compared to GDP market sector growth of 3.1%.
Net worth is defined as the difference between Total assets and Total liabilities. Australia's Net worth at the end of June 2007 was estimated to be $5,925 billion in current prices, an increase of $468 billion (8.6%) since 30 June 2006. The household sector has the highest net worth, with $5,073 billion at 30 June 2007, an increase of 12.2% on the previous years' position.
Investment at Current Prices
As a proportion of GDP, in 2006–07 investment by Non-financial corporations was 13.6%, Household investment was 10.2%, General government investment was 2.4% and Financial corporations investment was 0.7% of GDP.
In 2006-07 the ratio of imports to GDP was 21.8% and the exports to GDP ratio was 20.6%. Since 2004-05 imports increased 16.8% in volume terms compared to 6.2% growth in exports.