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All states were positive contributors to Australia's GDP growth in 2007-08. The highest contributions to GDP growth were Queensland (1.0 percentage points), New South Wales (0.9 percentage points), Victoria (0.8 percentage points) and Western Australia (0.7 percentage points).
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. Every state had positive growth in GSP per capita due to positive population growth in all states.
Four states showed growth rates in GSP per capita that were stronger than the Australian growth rate of 2.1%. Queensland (up 2.9%), Western Australia and South Australia (both up 2.7%) showed the strongest growth in GSP per capita.
REAL GROSS STATE INCOME
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 28 - 30).
The following graph shows annual percentage changes in RGSI per capita in 2007-08. With the exception of Queensland and Tasmania, all states and territories experienced growth in RGSI per capita stronger than GSP per capita in 2007-08. This is consistent with the national trend of strong growth in the terms of trade over the past seven years. In the past year, the continued improvement in the terms of trade has been led by strong rises in prices for mineral resources. Consequently, the impact of the terms of trade adjustment can be expected to have significantly affected those states with relatively large mining industries.
GROSS VALUE ADDED (GVA)
Volume growth in gross value added was positive in all states in 2007-08. The strongest growth was in Western Australia (up 6.2%), followed by Queensland (up 4.4%), Victoria (up 3.9%) and the Northern Territory (up 3.8%). Growth in Western Australia was driven by Agriculture, Forestry and Fishing (up 18.8%) and Manufacturing (up 16.4%). Queensland's growth was due to Property and Business Services (up 11.6%), the Northern Territory also experienced strongest growth in Property and Business Services (up 15.8%) and Victoria's growth was in Agriculture, Forestry and Fishing (up 13.5%).
At the Australian level, the main industries contributing to the 2007-08 gross value added growth of 3.9% were Property and Business Services, Construction and Finance and Insurance Services.
From a state perspective, there are differing industry impacts in gross value added growth. In 2007-08, the major contributors to growth in each state were:
STATE FINAL DEMAND (SFD)
Volume growth in State final demand in 2007-08 was positive in all states. The strongest growth was in Western Australia (up 9.3%), Tasmania (up 6.8%) and Queensland (up 6.7%). Growth in Western Australia and Tasmania was driven by strong private gross fixed capital formation whereas Queensland's growth was driven by public gross fixed capital formation.
All other states experienced growth in State final demand below that of national Domestic final demand growth of 5.3%.
All states were positive contributors to Australia's Domestic final demand growth in 2007-08. New South Wales and Queensland contributed 1.4 and 1.3 percentage points respectively.
GOVERNMENT FINAL CONSUMPTION EXPENDITURE
Government final consumption expenditure rose in all states in 2007-08. Queensland showed the strongest growth in volume terms of 5.0%, driven by strong state and local expenditure. The lowest growth was recorded in Tasmania (up 1.9%), followed by South Australia (up 2.5%). The major contributors to Australia's growth in Government final consumption expenditure of 3.4% were New South Wales (1.0 percentage points) and Queensland (0.9 percentage points).
HOUSEHOLD FINAL CONSUMPTION EXPENDITURE
Household final consumption expenditure volume growth was strongest in Western Australia (up 5.0%), Northern Territory (up 4.7%), Queensland and Tasmania (both up 4.4%). Weaker growth was experienced in the Australian Capital Territory (up 2.8%), New South Wales (up 3.1%) and South Australia (up 3.2%). The major contributors to Australia's growth in household final consumption expenditure of 3.7% were New South Wales (1.1 percentage points) and Victoria (0.9 percentage points) and Queensland (0.8 percentage points).
PRIVATE GROSS FIXED CAPITAL FORMATION
In 2007-08, Tasmania had the strongest growth in Private gross fixed capital formation (up 19.9%) due mainly to strong Machinery and Equipment and Intangible fixed assets investment. Western Australia (up 17.3%), Victoria (up 11.0%) and New South Wales (up 10.8%) also experienced strong growth. The remaining states all had weaker growth than the Australian growth of 10.3%: Queensland (up 8.4%), the Northern Territory (down 0.8%), South Australia (down 2.3%) and the Australian Capital Territory (down 8.2%). The major contributors to Australia's growth were Western Australia (3.2 percentage points), New South Wales (2.7 percentage points) and Victoria (2.5 percentage points).
PUBLIC GROSS FIXED CAPITAL FORMATION
The pattern of volume growth for Public gross fixed capital formation varied considerably across the states in 2007-08. The Northern Territory (up 24.5%) and Queensland (up 22.7%) showed the strongest growth whilst South Australia (up 1.4%), New South Wales (down 1.7%) and Victoria (down 11.5%) were below the Australia level. The major contributor to Australia's growth in public gross fixed capital formation was Queensland (6.8 percentage points).
TOTAL FACTOR INCOME
Factor incomes grew in all states with Western Australia showing the strongest growth (up 12.2%), followed by Northern Territory (up 11.4%), Queensland (up 9.1%) and the Australian Capital Territory (up 8.3%). The other states showed growth rates of between 4.6% and 7.6%, all below the Australian factor income growth of 8.3%.
There was strong overall growth in compensation of employees, which grew by 7.6% in Australia between 2006-07 and 2007-08. Western Australia (up 13.5%), the Northern Territory (up 11.6%) and the Australian Capital Territory (up 10.6%) showed the strongest growth while New South Wales (up 6.0%) and Victoria (up 6.4%) showed weakest growth.
There was also strong overall growth in gross operating surplus (GOS) and gross mixed income (GMI), growing in Australia by 9.1%. Most states experienced growth with GOS and GMI growth strongest in both Western Australia and the Northern Territory (up 11.4%), Queensland (up 10.2%) and Victoria (up 9.1%). All other states were below the national growth rate, the weakest being in Tasmania (down 1.6%) and the Australian Capital Territory (up 4.0%).
GROSS HOUSEHOLD DISPOSABLE INCOME PER CAPITA
The above 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.
Gross household disposable income per capita in 2007-08 was highest in the Australian Capital Territory and lowest in Tasmania. Please refer to Table 43 for more details. 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.
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