ANALYSIS


AUSTRALIAN ECONOMY GREW BY 0.4%

Australian gross domestic product (GDP) grew by 0.4% in the December quarter 2017, following a 0.7% rise in the September quarter. The economy grew 2.4% through the year.

HOUSEHOLD SPENDING DROVE GROWTH IN THE ECONOMY

Household final consumption expenditure increased 1.0% in the current quarter compared to the upwardly revised September quarter estimate of 0.5%. All components rose except for food and utilities.

TRADE DETRACTED FROM GROWTH

Net trade detracted from GDP growth in the December quarter 2017. Exports detracted 0.4 percentage points and imports detracted 0.1 percentage points. The through the year decline in net trade is the weakest result since March quarter 2012.

GROWTH IN COMPENSATION OF EMPLOYEES WAS ABOVE 1.0% FOR THE FOURTH CONSECUTIVE QUARTER

Compensation of employees (COE) recorded growth of 1.1% in the December quarter 2017. Consistent with the ongoing strength in employment, COE grew 4.8% through the year, the strongest rate of growth since June quarter 2012.

BROAD-BASED STRENGTH IN COMPENSATION OF EMPLOYEES

Through the year growth in compensation of employees (COE) is now stronger in a majority of industries compared to the same time last year. Through the year Construction COE increased 8.5% in line with the strong Construction employment reported in the Labour Force survey.

MANUFACTURING EXHIBITED STRENGTH THROUGH THE YEAR

Manufacturing gross value added fell 1.0% in the December quarter 2017 but grew 2.5% through the year. Machinery and Equipment Manufacturing was the main detractor, falling 7.3% in line with the sharp decline in exports of transport equipment which decreased 22.2%.

NEW BUILDING INVESTMENT GREW 3.3%

New building investment grew by 3.3% in the current quarter and is up 12.3% through the year. The states which contributed to growth were WA, NSW and ACT. This growth aligns with the strength observed in building approvals over the past year.