- Our economy grew 0.4 per cent during the June quarter 2023 and 3.4 per cent in annual terms. This was the seventh successive quarter of economic growth. Population growth due to post-pandemic migration saw GDP per capita fall 0.3 per cent, following a similar fall of 0.3 per cent in March.
- Labour market tightness continued. In the month of June, the unemployment rate was 3.5 per cent and a historically high percentage of the population was employed. Most of the increase in employment over the year was in full-time jobs. More than 32,000 people found work during the month of June.
- We worked more hours. We spent 2.4 per cent more time at work than we did last quarter, which, excluding the COVID-19 pandemic, was the fastest quarterly increase in hours worked on record. We worked 6.8 per cent more hours this year than last year, and with GDP rising by a smaller amount, labour productivity fell 3.2 per cent in annual terms.
- Inflation continued to moderate. The consumer price index rose 0.8 per cent in the June quarter and was up 6.0 per cent in the past 12 months. This marked the second consecutive quarter of lower annual inflation, down from the peak of 7.8 per cent in the December 2022 quarter. Food prices increased 1.6 per cent during the quarter, and housing costs as measured in the CPI rose 0.8 per cent.
- Higher interest rates squeezed consumption. Households shelled out $82.8 billion in mortgage interest payable during the year. This was almost double last year’s interest bill. Discretionary household spending fell 0.5 per cent in the June quarter, which was the third quarterly fall in a row. Spending on furnishings and household equipment fell for the fifth quarter in succession, down 3.4 per cent in annual terms. Retail sales fell 0.5 per cent during the quarter, and retail inventories fell sharply.
- Wages rose in response to tight labour market conditions, but cost of living pressures meant the household saving rate continued to fall. Average remuneration per employee rose 0.9 per cent during the quarter, slightly higher than inflation, but remuneration per hour fell 0.6 per cent.
- Baby, you can drive my car. Despite cost-of-living pressures, we bought 5.8 per cent more cars than we did last quarter, and 12.9 per cent more than last year. Machinery and equipment, which includes motor vehicles purchased by businesses, rose 4.2 per cent during the quarter.
- GST collection moderated, rising a small 0.5 per cent following weak retail sales, though GST rose 10.5 per cent in annual terms due to inflation. Gambling taxes fell 7.1 per cent during the quarter as households cut back on discretionary spending.
- Governments invested in infrastructure. Projects such as Snowy 2.0, the Western Sydney Airport, Inland Rail, Sydney’s new metro and Brisbane’s Cross River Rail saw public investment rise 8.2 per cent during the quarter.
- Are we there yet? Travel exports were at 88 per cent of pre-pandemic levels. The number of tourists arriving from China increased as our exports of travel services rose 18.5 per cent during the quarter. Australians spent an extra 11.2 per cent on international travel during the quarter, with significant increases to European destinations such as Italy, Portugal and Greece.
- Block party. Construction of new apartments rose strongly, particularly in Sydney and Brisbane. Total investment in dwellings fell 0.2 per cent during the quarter, with growth in new housing more than offset by falls in alterations and additions. There was still a significant backlog of construction work in the pipeline.
11 things that happened in the Australian economy during the June quarter