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5220.0 - Australian National Accounts: State Accounts, 2003-04  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 12/11/2004   
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NOTES


ABOUT THIS PUBLICATION

This publication contains state and territory estimates of gross domestic product (referred to as gross state product (GSP)) and its components, in current price and chain volume terms, for the years 1995-96 to 2003-04. Historical data starting in 1989-90 are available electronically through the subscription service, Ausstats, or as individual spreadsheets on www.abs.gov.au (see Appendix 1 for a full list of available tables).



REVISIONS IN THIS ISSUE

The estimates contained in this issue are based on annual supply and use benchmarks for Australia as published in the 2003-04 issue of Australian System of National Accounts (cat. no. 5204.0). They incorporate new and revised estimates from the annual supply and use tables for 2000-01, 2001-02 and 2002-03, and from other sources which normally become available by this time each year. The revised annual supply and use tables contain revisions to the contributions of each industry. The most significant revisions are to Agricultural value added following a review of compilation methods and to expenditure on dwelling rent following the introduction of new benchmark data from the 2001 Population Census. All states are affected by these revisions. Although the supply and use table revisions have not had a significant impact on the aggregate GDP movements for Australia, because the structure of economic activity varies across states, there are revisions to GSP for each state in response to the industry changes at the Australia level.



CHANGES IN THIS ISSUE

A new layout for components of private gross fixed capital formation has been introduced in tables 5 to 22. Tables showing revisions to components of GSP have been released in electronic form (tables 44 to 59).



CHANGES IN NEXT ISSUE

The estimates presented in the 2004-05 issue will reflect the impact of an important upgrade to the way the ABS compiles its economic statistics. A more detailed explanation appears in the Analysis of results section on page 7.



DATA VALUES AND ROUNDING

All values, unless otherwise indicated, are shown in Australian dollars rounded to the nearest million.


Where figures have been rounded, discrepancies may occur between the sums of the component items and totals.



NEXT ISSUE

The 2004-05 issue of this publication is expected to be released in November 2005.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Daniel Smith on Canberra (02) 6252 5892.



ANALYSIS OF RESULTS


GROWTH IN EXPERIMENTAL GSP CHAIN VOLUME MEASURES

The chain volume measure of gross state product (GSP) in 2003-04 increased in all states except the Northern Territory (-0.1%). Western Australia (7.5%), Queensland (5.1%) and South Australia (4.3%) were the only states to experience growth rates stronger than that for the national GDP measure (3.8%).

GSP, Chain volume measures - 2003-04

Annual growth
Average annual compound growth rates (1993-94 to 2003-04)
%
%

New South Wales
2.0
3.6
Victoria
3.7
3.9
Queensland
5.1
4.9
South Australia
4.3
3.2
Western Australia
7.5
4.4
Tasmania
3.0
2.0
Northern Territory
-0.1
3.6
Australian Capital Territory
1.5
2.9
Australia
3.8
3.9


The chain volume estimates of GSP included in this publication are derived indirectly. The method involves deriving a price deflator from the best possible current price and chain volume estimates of expenditure that encompass as much as possible of GSP. This deflator is then applied to current price income estimates of GSP. The chain volume estimates are labelled as 'experimental' for reasons set out in the Explanatory Notes (paragraphs 30 to 34). Users should therefore exercise caution when using these estimates for economic analysis.


Given these measurement issues, the ABS is currently developing estimates of GSP using the production approach. The ABS believes that better quality volume estimates of GSP can be produced using this approach. It is expected that these estimates will be available in November 2005.



GSP PER CAPITA

For some analytical purposes it is important to allow for the impact of population growth on movements in GSP. The annual growth in GSP per capita was lower than GSP growth for all states.


The following states had GSP per capita growth higher than the national outcome for GDP per capita at 2.5%: Western Australia (5.8%), South Australia (3.7%) and Queensland (2.7%).

GSP per capita, Chain volume measures - 2002-03 to 2003-04
Graph: GSP per capita, Chain volume measures—2002–03 to 2003–04




REAL GROSS STATE INCOME

Chain volume estimates of GSP measure the volume of goods and services produced in each state. If the terms of trade for a state change significantly (i.e. the prices for a state's exports and imports change at different rates) then GSP will not accurately reflect the change in real purchasing power of the income generated within a state. For this reason, real gross state income (RGSI) includes an adjustment for the terms of trade. (For details on the calculation method see the Explanatory Notes, paragraphs 35 to 37).


The following graph shows annual percentage changes in RGSI per capita in 2003-04. Growth in RGSI per capita has tended to be greater than GSP per capita over the past ten years, reflecting favourable movements in the terms of trade.

RGSI per capita, Chain volume measures - 2002-03 to 2003-04
Graph: RGSI per capita, Chain volume measures—2002–03 to 2003–04




STATE FINAL DEMAND (SFD)

Volume growth in state final demand was positive in all states in 2003-04 with the strongest growth in Western Australia at 8.0%. Growth is being driven by both total final consumption expenditure and particularly strong growth in total gross fixed capital formation.


The weakest growth was 3.6% in Victoria, which is below the national domestic final demand growth rate of 5.3%.

State final demand, Chain volume measures - 2003-04

Levels
2002-03
2003-04
SFD growth
Contribution to DFD
$m
$m
%
% pts

New South Wales
260,727
272,231
4.4
1.5
Victoria
195,987
203,138
3.6
0.9
Queensland
139,256
150,171
7.8
1.4
South Australia
55,241
58,072
5.1
0.4
Western Australia
75,769
81,817
8.0
0.8
Tasmania
15,560
16,785
7.9
0.2
Northern Territory
10,341
10,916
5.6
0.1
Australian Capital Territory
21,974
22,811
3.8
0.1
Australia
774,853
815,934
5.3
. .

. . not applicable


All states were positive contributors towards Australia's domestic final demand growth in 2003-04. New South Wales, Victoria and Queensland contributed 1.5, 0.9 and 1.4 percentage points respectively, accounting for around 75% of the growth in total domestic final demand.



GOVERNMENT FINAL CONSUMPTION EXPENDITURE

Government final consumption expenditure rose in all states in 2003-04. Queensland showed the strongest growth in chain volume terms of 3.7%, mainly driven by strong state and local expenditure. The lowest growth was recorded in Victoria at 1.2%, followed by Tasmania and South Australia at 1.7% and 2.3% respectively. The major contributors to Australia's growth in government final consumption expenditure of 2.5% were NSW (0.8 percentage points) and Queensland (0.6 percentage points).



HOUSEHOLD FINAL CONSUMPTION EXPENDITURE

Household final consumption expenditure volume growth was strongest in Queensland (8.8%), Tasmania (8.1%), Western Australia (6.8%) and the Northern Territory (6.2%). Weaker growth was experienced in New South Wales (4.5%), Victoria (4.5%), the Australian Capital Territory (4.5%) and South Australia (4.4%). The major contributors to Australia's growth in household final consumption expenditure of 5.6% were NSW (1.6 percentage points), Queensland (1.6 percentage points) and Victoria (1.2 percentage points).



PRIVATE GROSS FIXED CAPITAL FORMATION

In 2003-04, Australia experienced strong volume growth in private gross fixed capital formation. This growth is reflected in most states, with 5 of the 8 states showing strong growth of over 9%: Tasmania (16.7%), Western Australia (11.9%), Northern Territory (10.8%), Queensland (9.6%), and South Australia (9.1%). Growth was weaker for New South Wales (5.9%), Victoria (3.4%) while the Australian Capital Territory fell (-5.0%) due to a large fall in non-dwelling construction. The major contributors to Australia's strong growth of 7.0% were Queensland (1.9 percentage points), NSW (1.8 percentage points) and Western Australia (1.4 percentage points).



PUBLIC GROSS FIXED CAPITAL FORMATION

The pattern of volume growth for public gross fixed capital formation varied considerably across the states in 2003-04. While all states except the Northern Territory (-15.1%) grew, the Australian Capital Territory (26.0%) and Western Australia (22.0%) showed particularly strong growth, while in Queensland (1.6%) and Victoria (1.1%) the growth was more subdued. The major contributors to Australia's growth in public gross fixed capital formation of 5.4% were Western Australia (2.2 percentage points), NSW (1.5 percentage points) and the Australian Capital Territory (0.7 percentage points), partly offset by a fall in the Northern Territory (0.2 percentage points).



INDUSTRY COMPOSITION OF TOTAL FACTOR INCOME

Factor incomes grew in all states with Tasmania showing the strongest growth (8.7%), followed by Queensland (8.5%) and the Australian Capital Territory (7.9%). The other states showed growth rates of around 7 percent, except the Northern Territory (2.4%), which was affected heavily by declines in the mining industry (8.2%). Australian factor incomes grew by 7.3%.


Compensation of employees grew by 5.6% in Australia between 2002-03 and 2003-04. Queensland (7.8%) showed the strongest growth while South Australia showed the weakest growth (3.6%).


The pattern of growth in gross operating surplus and gross mixed income varied across the states. GOS growth varied from 13.0% in Tasmania to -0.9% in the Northern Territory while GMI varied from 20.6% in Western Australia to 1.7% in Tasmania.


The table below shows industry contributions to total factor income for 2003-04. In line with long term trends, there has been a shift from goods producers to service providers over the period 1989-90 to 2003-04.

Industry Contribution to Total Factor Income(a) - 2003-04

NSW
Vic
Qld
SA
WA
Tas
NT
ACT
Aust
%
%
%
%
%
%
%
%
%

Agriculture, forestry and fishing
2
3
4
6
5
6
3
-
3
Mining
2
1
7
2
18
1
20
-
5
Manufacturing
12
15
10
14
9
14
4
2
12
Electricity, gas & water supply
2
3
2
4
3
6
2
2
3
Construction
6
6
8
7
8
6
8
8
7
Wholesale trade
6
6
6
5
5
4
3
2
5
Retail trade
5
6
7
5
5
7
5
4
6
Accommodation, cafes and restaurants
2
2
3
2
2
3
3
2
2
Transport and storage
5
5
6
5
5
5
5
3
5
Communication services
3
3
3
3
2
3
3
2
3
Finance & insurance
10
9
5
7
5
7
3
4
8
Property & business services
14
13
9
9
10
5
9
14
12
Government administration and defence
4
3
4
3
2
6
8
26
4
Education
4
5
5
5
4
5
5
6
5
Health and community services
6
6
6
8
6
9
7
6
6
Cultural and recreational services
2
2
1
2
1
1
2
3
2
Personal and other services
2
2
3
3
2
2
2
3
2
Ownership of dwellings
10
9
8
9
6
8
6
8
9
General government(b)
2
2
3
2
2
3
3
4
2
Total
100
100
100
100
100
100
100
100
100

- nil or rounded to zero (including null cells)
(a) Industries may not add to total due to rounding differences.
(b) State details for general government gross operating surplus by industry are not available.


The main industries contributing to 2003-04 total factor income growth are the manufacturing and the services industries, namely property and business services, ownership of dwellings, finance and insurance, wholesale trade, and retail trade.


There are differing industry impacts in each state in total factor income. The Northern Territory and Western Australia are dominated by the mining industry, in Victoria, South Australia and Tasmania the manufacturing industry is significant, while the Australian Capital Territory has strong property and business services and government administration and defence industries.



GROSS HOUSEHOLD DISPOSABLE INCOME PER CAPITA

The previous analysis of GSP per capita concentrates on the level of economic production and its growth. It does not provide a measure of incomes received by residents of a particular state, because a proportion of income generated in the production process may be transferred to other states or overseas (and conversely income may be received from other states or overseas). A measure that takes these flows into account is gross household disposable income per capita which is shown below.

Gross household disposable income per head of mean population - 2003-04

$

New South Wales
26,674
Victoria
27,238
Queensland
23,019
South Australia
23,852
Western Australia
26,186
Tasmania
21,963
Northern Territory
28,683
Australian Capital Territory
38,545
Australia
25,946


Gross household disposable income per capita in 2003-04 was highest in the Australian Capital Territory and lowest in Tasmania. Differences between the states reflect differences in the impact of a range of factors including the average level of compensation of employees received per employee, the proportion of the population in employment, the age distribution of the population, and differences in the level of dwelling rent (including that imputed to owner occupiers). For example, a significant reason for the high level of gross household disposable income per capita in the Australian Capital Territory compared with other states is that the labour force participation rate is much higher there than in the rest of Australia.



CHANGES IN NEXT ISSUE

The annual estimates for Australia presented in the 2004-05 issue of Australian System of National Accounts (cat. no. 5204.0) will reflect the impact of an important upgrade to the way the ABS compiles its economic statistics.


At the same time as incorporating these new data, the ABS plans to introduce changes to other series to reflect updated data or methodological improvements. These changes may impact on the full timespan. More detailed explanations about major changes to the Australian annual estimates will be described in a feature article in the March quarter 2005 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0).


The effect of these changes on Australia level GDP growth are expected to be small but the industry shares are expected to change. Since the structure of economic activity varies across states, changes in Australia level industry shares of GDP may lead to an impact on growth rates for each state but the nature of this impact is unknown at this stage.


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