In this Issue
Includes revisions and changes to this issue.
Key Aggregates The Australian economy expanded by 3.7% in 2007-08. Real net national disposable income grew more strongly than GDP (up 4.6% in 2007-08), reflecting strong growth in the Terms of trade (up 5.3%). The Household saving ratio was 0.6% for 2007-08, down from 1.9% in 2006-07. The index of Market sector (footnote 1) labour productivity increased by 1.1%. Multifactor productivity (MFP) fell by 0.4% in 2007-08, reflecting a 3.8% increase in Gross value added for the Market sector against an increase of 4.3% in total labour and capital inputs.
Expenditure of GDP
Gross fixed capital formation was a major contributor to GDP growth in 2007-08, taking over from Household consumption expenditure which was the key driver in 2006-07. Gross fixed capital formation increased 9.7% and contributed 2.6 percentage points to GDP growth. Household final consumption expenditure increased 3.7%, and contributed 2.1 percentage points to GDP growth. Within Household final consumption expenditure, Recreation and culture (up 6.4%), Transport (up 3.4%) and Rent and other dwelling services (up 2.2%) were the largest contributors. Private business investment contributed 2.3 percentage points to GDP growth in 2007-08, with increases in investment in Machinery and equipment (up 18.4%) and Non-dwelling construction (up 10.8%).
From an industry perspective, growth over 2007-08 was recorded in most industries including Agriculture (up 8.0% following a decline of 17.7% in 2006-07), Communication services (7.2%), Transport and storage (6.0%) and Property and business services (5.7%). Manufacturing recorded moderate growth overall of 3.4%, but within the industry there was strong growth in Metal products manufacturing which was up 11.4%, and Other Manufacturing (11.5%). Textile, clothing and footwear, and Wood and paper products both fell, down 4.3% and 4.2% respectively. A fall was also recorded for Water supply, sewerage and drainage services (-5.0%) for the third consecutive year.
Income from GDP
In the Income components of GDP in 2007-08, there was growth in Compensation of employees of 8.0%, and growth in Gross operating surplus (GOS) of 10%. The growth in GOS was driven by growth in Private Non-financial corporations (11.0%) and Financial corporations (6.0%) offset by a fall for Public non-financial corporations (-6.0%).
Prices in the National Accounts
The annual movements for the chain price indexes for GDP and Domestic final demand were 4.4% and 3.3% respectively. The gap in price movements is mainly due to changes in the prices paid for imports and the prices received for exports.
Multifactor productivity (MFP) fell by 0.4% in the market sector in 2007-08. In addition to strong growth in labour input of 2.7%, there was a strong increase in capital services in 2007-08 of 6.3%. Total combined inputs (capital services and labour) grew by 4.3% compared to GDP market sector growth of 3.8%.
The Net worth of Australia is defined as the difference between Total assets and Total liabilities. Australia's Net worth at 30 June 2008 was estimated to be $6,390 billion in current prices, an increase of $426 billion (7.1%) since 30 June 2007.
Investment at Current Prices
As a proportion of GDP, in 2007–08 investment by Non-financial corporations was 14.7%, Household investment was 10.3%, General government investment was 2.6% and Financial corporations investment was 0.7% of GDP.
In 2007-08 the ratio of imports to GDP was 22.5% and the exports to GDP ratio was 20.7%. Since 2000-01 imports increased 91.8% in volume terms compared to 15.0% growth in exports.
1. The market sector of the economy consists of the following industries: Agriculture, forestry & fishing, Mining, Manufacturing, Electricity, gas & water, Construction, Wholesale trade, Retail trade, Accommodation, cafes & restaurants, Transport & storage, Communication, Finance & insurance, and Cultural & recreational services. <back