Australian economy grew by 0.5%
Australia's gross domestic product (GDP) grew by 0.5% in the June quarter 2019, following a 0.5% rise in the March quarter. The Australian economy grew 1.4% through the year.
Gross domestic product, Chain volume measures: Seasonally adjusted
Government expenditure grows strongly
Government final consumption expenditure rose 2.7% in the quarter and remains strong through the year at 6.2%. State and local government consumption expenditure was the main contributor to growth with increases in both employee expenses and non-employee expenses. National non-defence consumption expenditure also contributed to growth with continued spending on disability and aged care services.
Government final consumption expenditure, Chain volume measures: Seasonally adjusted
Dwelling investment continues to decline
Investment in new and used dwellings fell by 6.0% in the quarter. Through the year growth is down 10.9%. There was broad-based weakness this quarter with houses (-6.1%) and other residential dwellings (-5.6%) both declining. These falls are consistent with the weakness in dwelling approvals. All states and territories recorded falls in dwelling investment with the exception of Tasmania.
New and used dwelling investment, Chain volume measures: Seasonally Adjusted
Machinery and equipment drives investment
Mining investment rose 2.4% in the quarter, the first increase since June 2018. Mining related machinery and equipment drove the growth. Non-mining investment fell 1.8% driven by non-dwelling construction. Investment in non-residential buildings declined after strength in the March quarter. Weakness in engineering construction was driven by falls in infrastructure and renewables projects. Machinery and equipment partly offset the decline.
Mining and non mining investment, Chain volume measures: Seasonally adjusted
Net exports contributes 0.6 percentage points to GDP growth
Exports contributed 0.3 percentage points to GDP growth driven by non-rural goods with continued external demand for mining commodities. Imports also contributed 0.3 percentage points to GDP growth. The fall in imports was across the board with declines in all major categories. Consumption goods (-2.9%) had the largest decline in imports.
Net exports contribution to growth, Chain volume measures: Seasonally adjusted
Mining picked up to meet external demand
Mining GVA rose 3.4% after adverse weather impacts in the previous quarter. Coal and Iron Ore production returned to expected levels. Oil and Gas Extraction drove the growth with increased production from new LNG facilities. The strength in mining production is reflected in increased exports.
Mining gross value added, Chain volume measures: Seasonally adjusted
Household consumption remains subdued
Household final consumption expenditure increased 0.4% in the quarter, with through the year growth moderating to 1.4%. The growth in household consumption was modest across most categories. However, there were falls in household spending on purchase of vehicles and electricity, gas and other fuel.
Household final consumption expenditure, Chain volume measures: Seasonally adjusted
Household saving ratio lowers
The household saving ratio fell to 2.3 with growth in household final consumption expenditure outpacing household disposable income. The growth in disposable income was partly driven by growth in compensation of employees, which was offset by a fall in non-life insurance claims. The decline in income received for non-life insurance claims in the June quarter follows two positive quarters as a result of the NSW hailstorms and QLD floods.
Household saving ratio, Seasonally adjusted