National Accounts - June Quarter 2010
Wayne Swan
posted Wednesday, 1 September 2010
Today’s National Accounts show that the Australian economy grew strongly in the June quarter and continues to outperform most other advanced economies despite renewed uncertainty in the global economy.
Gross Domestic Product grew 1.2 per cent in the June quarter to be 3.3 per cent higher through the year.
This is an outstanding outcome that all Australians can be proud of. It shows the Australian economy continues to benefit from strong economic management as well as the hard work and resilience of the Australian people.
While output in six of the G7 economies is still lower than its pre crisis level, in Australia output has grown by 4.2 per cent since the middle of 2008.
Today’s data provide further evidence that a broad-based self-sustaining private sector recovery is gathering momentum as fiscal and monetary stimulus is withdrawn.
This result shows Australia’s economic recovery is proceeding as expected, placing Australia in a strong position to deliver important economic reforms and tackle future global economic challenges with confidence.
Household consumption spending rose by 1.6 per cent in the June quarter, with growth underpinned by healthy levels of consumer confidence and solid increases in employment and wages.
Building investment and engineering construction both increased in the June quarter. New engineering construction rose 2.5 per cent in the quarter, driven primarily by mining sector investment. Non-residential building investment rose in the quarter, but from a low level with conditions in the industry still difficult. Dwelling investment increased 5.0 per cent in the June quarter, although forward indicators suggest softer outcomes in coming quarters.
New machinery and equipment investment fell in the quarter, following the withdrawal of the Government’s temporary investment tax incentives, which brought forward considerable investment spending during the latter part of 2009.
Solid business confidence and increased profitability is expected to underpin strong growth in investment in coming quarters, consistent with the Australian Bureau of Statistics Private New Capital Expenditure and Expected Expenditure report released last week, which pointed to a substantial increase in planned investment in 2010-11.
Export volumes rose 5.6 per cent in the quarter, driven by non-rural commodities, with coal exports rebounding to record highs. Import volumes rose 3.0 per cent.
The strong growth in the real economy and a large rise in the terms of trade saw nominal GDP rise by 3.6 per cent in the quarter, the largest quarterly increase since 1988. The terms of trade rose 12.5 per cent in the quarter, to be 24.5 per cent higher over the year.
The rise in nominal incomes reflects strong increases in both profitability and wages. Private non financial corporations gross operating surplus rose by 10.7 per cent in the quarter, driven in part by large increases in mining profits.
Today’s figures results follow data yesterday showing Australia achieved its highest quarterly trade surplus on record in the June Quarter.
Australia has also managed to avoid the very high unemployment experienced in other advanced economies, with over 500,000 jobs created under the Labor Government.
These strong results provide another example of the sturdy economic foundations and effective policy settings that have seen Australia fight off recession and now recover much more strongly than other advanced economies.
The Government has put forward a comprehensive plan to continue strengthening and modernising our economy by cutting business taxes, especially for small business, boosting national savings, investing in the skills and education of our people, and building first-class infrastructure like the National Broadband Network.