Published: Wed, December 06, 2017
Worldwide | By Gretchen Simon

Australia GDP Gains 0.6% On Quarter In Q3

Australia GDP Gains 0.6% On Quarter In Q3

The national accounts for the September quarter showed the Australian economy grew by a less-than-expected 0.6 per cent in the three months to the end of September.

A Westpac economist, Andrew Hanlan, has also pointed out that the jump in the annual growth rate to 2.8% has a technical reason: the quarterly profile for GDP over the past year is now 0.9%, 0.4%, 0.9% and 0.6% (which equals 2.8%).

Household consumption expenditure increased only 0.1 per cent in the September quarter, making it the lowest quarterly rate of growth since the 2008.

So far this year, Australia has experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, Mr Morrison said.

Analysts noted the economy would have to expand by a strong 0.9 percent this quarter, if annual growth was not to slow again.

Economists said the quarterly expansion was driven by increased activity in both private business investment and public infrastructure, which "underpinned broad growth across the industries".

The spending figure was so weak because households pulled back significantly on spending at cafes and restaurants, on recreation, household goods, alcohol and tobacco and health services.

The biggest fall in the September quarter was in agriculture, forestry and fishing, which declined by 4.1 per cent.

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Treasurer Scott Morrison said the figures indicated "solid" economic growth, however, with growth accelerating from 1.9 per cent to 2.8 per cent through the year.

Worldwide trade did not contribute to third quarter economic growth due to a decline in commodity prices, while housing investment added nothing to growth either.

"This print will come as a major disappointment for the RBA", Westpac's chief economist, Bill Evans, said.

Households, however, delivered only a small amount of growth in a sign of the struggles some families are having on the back of low wages growth.

"We have seen an increase of more than 1,000 jobs a day."

About 17 out of 20 industries recorded growth during the quarter, underlining the improvement in business conditions and corporate earnings over the past year.

"Business conditions, as surveyed, are at their highest level in 20 years. our enterprise tax plan is a key part of this, which is why it must be supported".

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