Australia’s GDP shrank -1.9% q/q in Q3, less than market expectations of a 2.7% decline and after 0.7% growth in Q2. This was the first contraction in the economy since Q2 2020 with the damage done from lengthy lockdowns across New South Wales, Victoria, and the Australia Capital Territory due to Covid-19.
Australian Gross Domestic Product (GDP) fell 1.9 per cent in seasonally adjusted chain volume terms in the September quarter 2021 and was up 3.9 per cent through the year, according to figures released by the Australian Bureau of Statistics (ABS) today.
- GDP -1.9% q/q beat expected -2.7%, prior 0.7%
- GDP +3.9% y/y beat expected 3.0%, prior 9.6%
Australia’s Household consumption fell for the first time in five quarters to -4.8% down from 1% in Q2. The fall off in spending on services and private investment rising the least in a year (0.8% vs 1.9%) hurt. There was also a sharp slowdown in dwellings investment and a fall in machinery and equipment investment.
“Household spending in NSW, Victoria and the ACT fell 8.4 per cent, compared to the other states which rose 0.7 per cent,”– Acting Head of National Accounts at the ABS, Sean Crick
However due to the Coivid-19 outbreak government spending expanded much faster (3.6% vs 1.3%) as it was led by health-related expenditure. Net external demand contributed positively, as exports of goods and services rose 1.2%, supported by mining and rural commodities. Imports dropped 4.0% due to persistent global supply constraints and a fall in domestic demand.
On a yearly basis, the economy grew 3.9%, after a marginally revised 9.5% growth in Q2.
The household saving to income ratio rose from 11.8 per cent to 19.8 per cent. The rise in household saving was driven by increased household income, coupled with a decline in spending. Household gross disposable income rose 4.6 per cent, the fastest rise since December quarter 2008. Government support payments to households and unincorporated businesses affected by COVID-19, along with increased dividend payments, contributed to the increase in household income.
“The household saving ratio was below the previous peak of 23.6 per cent in June quarter 2020, when national lockdowns drove a larger decline in household spending compared with this quarter,” Mr Crick said.
Source: Australian Bureau of Statistics
From a Sunburnt Country…
From The TradersCommunity Australian News Desk