Australian economy contracted 0.3%
Gross Domestic Product (GDP) fell 0.3%. The through the year growth was 1.4%, the lowest result since the Global Financial Crisis in September 2009, well below the long-term average of 3.4%. The through the year growth reflects a strong contribution from net trade and subdued growth in domestic final demand.
Gross domestic product, chain volume measures: seasonally adjusted
Private demand drives the fall in domestic final demand
Domestic final demand detracted 0.5 percentage points from GDP, with household final consumption expenditure and private investment contributing to the fall. Government final consumption expenditure partly offset the fall, contributing 0.3 percentage points, as government increased spending in response to bushfires and COVID-19
Domestic final demand, chain volume measures: seasonally adjusted - contributions to growth
Weakest household spending result since the Global Financial Crisis
Household final consumption expenditure fell 1.1%, the first decline since December 2008, detracting 0.6 percentage points from GDP. The through the year result was -0.2%, the weakest since March 2009.
Household final consumption expenditure, chain volume measures: seasonally adjusted
Unprecedented decline in household spending on services
Spending on services fell 2.4% with the introduction of social distancing restrictions and travel bans. Spending on goods rose 1.0% driven by food, alcohol, pharmaceutical products and home office equipment as households prepared for lockdown measures.
Goods and services consumption expenditure, chain volume measures: seasonally adjusted
Dwelling investment continues to decline
Investment in new and used dwellings fell 2.9% in the quarter and 15.5% through the year, reflecting continued weakness in dwelling approvals. Both houses (-1.4%) and other residential dwellings (-5.2%) contributed to the decline this quarter.
New and used dwelling investment, chain volume measures: seasonally adjusted
Non-mining drives the fall in private business investment
Non-mining business investment fell 1.7% this quarter and 6.6% through the year, reflecting weakness across both non-dwelling construction and machinery and equipment purchases. Mining business investment rose 3.6% this quarter and increased 10.3% through the year as miners continued investment in new technologies and automation.
Mining and non-mining investment, chain volume measures: seasonally adjusted
Net exports contributed 0.5 percentage points to GDP
The fall in imports (-6.2%) was greater than the fall in exports (-3.5%). Imports of goods fell 3.9%, reflecting reduced imports of consumption and intermediate goods. Imports of services fell 13.6% with travel services falling significantly in response to travel bans. Exports of goods fell 0.7%, driven by a fall in rural goods, particularly meat and cereal products. Exports of services fell 12.8%, reflecting the travel ban impacts on education related travel and tourism.
Net exports, chain volume measures: seasonally adjusted - contributions to growth
COVID-19 impacts selected industries
Gross value added fell 0.3% in the quarter but remained up 1.3% through the year. Many service industries recorded falls as a result of COVID-19 related lockdown and social distancing measures. The largest falls were seen in Accommodation and Food Services, Transport, Postal and Warehousing, Recreation and Culture. In contrast, Manufacturing, Wholesale Trade and Retail Trade recorded rises with increased demand for food, chemical products and home office equipment.
Gross value added, selected industries, volume measures: seasonally adjusted
Health care services records a fall
Health care and social assistance value added has fallen for the first time since June quarter 2011, down 0.1% in March quarter 2020. This was driven by the postponement of elective surgeries and reduced face to face visits to medical practitioners in the wake of the COVID-19 pandemic.
Gross value added - health care and social assistance, volume measures: seasonally adjusted
Household saving ratio driven by non-labour income
The household saving to income ratio rose to 5.5%, up from 3.5% in the December quarter, reflecting a rise in gross disposable income and falls in consumption. Gross disposable income was driven by a 6.2% increase in social assistance benefits due to both an increase in the number of recipients and the introduction of new support packages in response to COVID-19 and bushfires. Non-life insurance claims increased 11.1% as a result of bushfires and hailstorms events in the quarter. Household saving is now at the highest rate since September 2016
Household saving ratio, seasonally adjusted
Household income growth, contribution to growth in non-labour income - current prices: seasonally adjusted