Australia’s umbilical ties to China were also underscored after the numbers when commodity prices and mining stocks fell in response not to Australia’s GDP win but to tepid economic numbers from the world’s number-two economy. It also points to the issues for Australian companies trying to grow earnings when nominal GDP is so low.
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There’s been house price growth in every capital city except Perth (down 2.8%) in 2016 so far, with Sydney (up 8.3%), Hobart (up 6.5%) and Canberra (up 6.2%) the strongest performers. Australia has now chalked up 25 years of continuous growth.
“Household consumption – that was also decent”.
“If the labour participation rate does decline over time, one obvious effect is that growth in the workforce would be lower for any given rate of growth of the population”, said Klaus Baader, chief economist for Asia Pacific at Societe Generale, pointing to a recent study on Australia’s future labour market trends.
“If you go back five years, net service exports deducted 0.75 percentage points from GDP growth”. Labor’s housing investment tax is a key risk to this sector of the economy, as it is to consumer confidence.
Australia’s economy grew at the fastest pace in four years last quarter-underpinned by an export bonanza-even as diminishing inflation pressures spurred the central bank to cut interest rates in May.
Today’s data support the story of an ongoing transition to non-mining activity.
What’s more, Mr Bloxham predicted this growth in export services was likely to continue.
The recovery in non-mining investment remains slower than expected. “Now we are seeing the boom in mining and resource-related exports, that’s what is driving this growth”.
Exports contributed 1.0 percentage points to the March quarter growth while household spending added 0.4 percentage points, the data showed.
This helped to offset weak business investment.
Treasury modelling released in February found that simply taxing and spending has a negative drag on our economy.
“The mix of growth is pretty much as expected”.
Our plan rewards effort by seeking to reduce the burden of tax on hardworking Australians through lifting the tax threshold for hardworking average full time workers and preventing 500,000 being pushed into the second highest tax level.
Domestic final demand, which is the total amount of spending in the economy, only rose by 0.1 per cent in the quarter and 0.9 over the year.
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Economists surveyed by Bloomberg had typically expected quarterly growth of 0.8 per cent and annual growth of 2.8 per cent, although year-on-year forecasts ranged from 2.4 to 3.2 per cent.
