5206.0 - Australian National Accounts: National Income, Expenditure and Product, Sep 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 01/12/2004   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

GROWTH RATES IN GDP

The graph below provides a comparison of the quarterly growth rates for chain volume measures of GDP in both seasonally adjusted and trend terms over the last fourteen years. Following the fall in GDP (in seasonally adjusted chain volume terms) in December quarter 2000 there have been 15 consecutive quarters of growth.

Percentage Changes, Chain volume measures
Graph: Growth rates in GDP, Percentage changes, Chain volume measures



Growth (in seasonally adjusted chain volume terms) over the past four quarters has been driven by strong public gross fixed capital formation (up 12.2%), private business investment (up 7.1%), household final consumption expenditure (up 5.4%) and dwelling investment (up 7.0%). Offsetting these strong contributions was the strong rise in imports of goods and services (up 13.5%). On the industry side, the strongest contributors over the past four quarters have been agriculture, forestry, fishing and hunting (up 13.2%), transport and storage (up 7.9%), cultural and recreational services (up 6.9%), retail trade (up 6.4%) and construction (up 6.4%). Mining fell by 1.6% and accommodation, cafes and restaurants by 0.9% over the period.



REAL GROSS DOMESTIC INCOME

A measure of the real purchasing power of income generated by domestic production is the chain volume measure of GDP adjusted for the terms of trade effect, which is referred to as real gross domestic income (see Glossary for definition). The graph below provides a comparison of quarterly movements in trend GDP (chain volume measure) and real gross domestic income. During the September quarter, trend real gross domestic income increased by 0.9%, compared to the increase in the trend chain volume measure of GDP of 0.5%, reflecting an improvement in the terms of trade. Trend and seasonally adjusted estimates of real gross domestic income are shown in tables 1 and 2.

PERCENTAGE CHANGES, Trend
Graph: Real gross domestic income, Percentage changes, Trend



The graph below shows the trend terms of trade over the past fourteen years. The strong rise in the terms of trade since 1999 reflects strong growth in export prices relative to import prices and implies an increase in purchasing power for Australia relative to its trading partners.

Trend, (2002-03 = 100)
Graph: Terms of trade, Trend




REAL NET NATIONAL DISPOSABLE INCOME

A broader measure of changes in national economic wellbeing is real net national disposable income. This measure adjusts the chain volume measure of GDP for the terms of trade effect, real net incomes from overseas and consumption of fixed capital (see Glossary for definition). The graph below provides a comparison of quarterly movements in trend GDP (chain volume measure) and real net national disposable income. During the September quarter, trend real net national disposable income increased by 0.9%, while the increase in the trend chain volume measure of GDP was 0.5%.

Percentage Changes, Trend
Graph: Real net national disposable income, Percentage changes, Trend




HOUSEHOLD SAVING RATIO

In both trend and seasonally adjusted terms the household saving ratio (see Glossary for definition) was negative in the September quarter 2004 implying that household consumption was greater than household disposable income. In trend terms the ratio was -1.8% in the September quarter 2004 and in seasonally adjusted terms it was -1.9%. The following graph presents the household saving ratio derived from trend and seasonally adjusted data.

Household saving ratio, Current prices
Graph: Household saving ratio, Trend and seasonally adjusted, Current prices



Although seasonally adjusted household saving has been negative over the past two years, net national saving has been positive over the same period. The net national saving ratio in the September quarter 2004 was 4.0% in seasonally adjusted terms.


Caution should be exercised in interpreting the household saving ratio in recent years, because major components of household income and expenditure may still be subject to significant revisions. The impact of these revisions on the saving ratio can cause changes in the apparent direction of the trend.



COMPENSATION OF EMPLOYEES

In September quarter 2004, seasonally adjusted compensation of employees grew by 1.3%, while the seasonally adjusted number of employees recorded in the Labour Force survey grew by 0.8%. Thus, average compensation per employee increased by 0.5%. This follows growth of 0.2% and 1.1% in the previous two quarters. In annual terms, the growth rate in average compensation per employee between 2002-03 and 2003-04 was 3.4% compared with 3.6% growth over the same period in the total hourly rates of pay, excluding bonuses as published in Labour Price Index, Australia (cat. no. 6345.0). (It should be noted that the conceptual bases for the two wage measures are different.)


In this issue, national accounts adjustments made to the estimates of the number of employees recorded in the labour force survey series have been removed. This change has caused revisions to the historical estimates of the average compensation per employee time series for both the level estimate and the percentage change movement.



PRIVATE NON-FARM INVENTORIES TO TOTAL SALES RATIO

In trend current price terms, the book value of private non-farm inventories increased by $2,450 million (2.5%) in September quarter 2004, while total sales rose by $3,142 million (2.5%). Consequently, the trend inventories to total sales ratio (see Glossary for definition) was 0.795 in both the June and September quarters 2004. The following graph presents the ratio of private non-farm inventories to total sales over the last fourteen years.

Trend, Current Prices
Graph: Private non-farm inventories to total sales, Trend, Current prices




IMPORTS TO DOMESTIC SALES

The imports to domestic sales ratio (see Glossary for definition), trended and at current prices, rose from 0.352 in the June quarter 2004 to 0.362 in the September quarter 2004. This reflects a rise of 4.3% in imports of goods accompanied by a 1.5% rise in domestic sales. The following graph presents the ratio of imports to domestic sales over the last fourteen years.

Trend, Current Prices
Graph: Imports to domestic sales, Trend, Current prices




RELIABILITY OF CONTEMPORARY TREND ESTIMATES

Trend estimates are used throughout this publication as an alternative approach to the analysis of movements in time series data. Further details regarding the procedures used to estimate the trend series are described in the Explanatory Notes (paragraphs 13 - 17) and in Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0) released in August 2003.


Potential revisions to trend estimates can be indicated by showing the effects of particular changes in seasonally adjusted estimates that might occur in the next quarter. The table below shows the trend estimates for the last ten quarters and the values to which they would be revised if the given movements in seasonally adjusted GDP actually occurred in December quarter 2004. Seasonally adjusted growth of 0.6% is required in December quarter 2004 to maintain, in December quarter 2004, the trend growth of 0.5% currently estimated for September quarter 2004.

Percentage change in GDP Chain volume measure

Trend estimate if seasonally adjusted GDP changes by the following amounts in December qtr 2004
Seasonally adjusted GDP as published in table 2
Trend GDP as published in table 1
Grows by 1.0%
No change
Falls by 1.0%

2002
June
1.3
0.9
0.9
0.9
0.9
September
0.8
0.8
0.8
0.8
0.8
December
0.4
0.6
0.6
0.6
0.6
2003
March
0.8
0.5
0.5
0.5
0.5
June
0.4
0.9
0.9
0.9
0.9
September
1.7
1.2
1.2
1.2
1.2
December
1.5
1.2
1.2
1.2
1.2
2004
March
0.5
0.9
0.9
1.0
1.0
June
0.8
0.6
0.6
0.5
0.4
September
0.3
0.5
0.6
0.3
0.1



REVISIONS SINCE THE JUNE QUARTER 2004 RELEASE

Revisions were made to a range of national accounts estimates in the annual publication Australian System of National Accounts, 2003-04 (cat. no. 5204.0) which was released on 10 November 2004. Further revisions have been made to the 2003-04 estimates in this release, notably to seasonally adjusted series following the annual seasonal reanalysis that is completed for the September quarter release. The bulk of the revisions to various series were reflected in the annual publication and resulted from the availability of more up to date source data and the incorporation of new supply and use benchmarks for 2000-01, 2001-02 and 2002-03. The balancing of the supply and use tables ensures that the three measures of GDP are consistent but inevitably some components are revised as a result of the balancing process.


Compared with the estimates released in the June quarter 2004 issue of this publication, the level of GDP in current prices has been revised down in 2000-01 (-$2.7 billion) and in 2001-02 (-$1.1 billion) and upwards in 2002-03 (+$2.0 billion) and in 2003-04 (+$1.8 billion). These revisions impacted on growth rates to a small extent. In chain volume terms the level of GDP has been revised upwards in 2000-01 (+0.1%), 2002-03 (+0.1%) and in 2003-04 (+0.4%) and was unchanged in 2001-02. A number of components of GDP were revised consistent with these aggregate movements. On the income side:

  • the gross operating surplus of private non-financial corporations and gross mixed income of unincorporated enterprises were revised reflecting both the incorporation of new source data from the Australian Taxation Office and the effect of supply and use table balancing
  • the gross operating surplus of financial corporations was revised reflecting revisions to financial intermediation services indirectly measured (using updated interest flow data), and to a smaller extent, revisions to the insurance service charge
  • GOS on dwellings owned by persons was revised downwards following the introduction of new benchmark data for dwelling rent from the 2001 Population Census.

On the expenditure side there were revisions to household final consumption expenditure reflecting the incorporation of new benchmark data for dwelling rent and the effect of supply and use table balancing.