Thursday, June 07, 2012

GDP. We're booming, if you can believe it.

On one side of the country

North of the Brisbane line:

Trend growth in demand, year to March

Northern Territory 15.1%
Western Australia 13.6%
Queensland 7.8%

The South East:

ACT 3.2%
NSW 2.1%
Victoria 1.9%
South Australia 0.7%
Tasmania -0.2%

A surge in mining investment and an apparent upswing in consumer spending have delivered Australia one of the fastest economic growth rates in the developed world.

At 4.3 per cent, Australia’s annual growth rate is faster than any of the developed nations in the Organisation for Economic Co-operation and Development. The quarterly rate of 1.3 per cent is more than twice the most optimistic forecast.

One day after Coalition Treasury spokesman Joe Hockey described the Australian economy as “underperforming” Treasurer Wayne Swan used the March quarter news to lambaste the opposition for talking the economy down, denting confidence and then complaining about weak confidence.

He said business figures were also to blame, echoing concerns held within the Reserve Bank.

Asked who in the business community was relentlessly negative he declined to name names, telling ABC 7.30 there were “one or two who go out there and run the economy down all the time”.

“Let’s make these figures an extraordinary circuit breaker. This tide of negativity, this relentless negativity from the doomsayers has to stop. It insults the hard work that so many Australians put in to make our economy strong.”

“We have seven Eurozone economies in recession, as well as in the UK, and many more developed economies which are crippled by unemployment. This result says something very special about Australia and about our capacity to face up to the worst that the world can throw at us.”

New engineering construction - most of it related to mining - accounted for almost all of the quarter’s economic growth, jumping 19.7 per cent over the quarter and 53 per cent over the year. Consumer spending was almost as important, with the volume of goods and services bought swelling a near record 1.6 per cent over the quarter and 4.2 per cent over the year.

The figures suggest Australians bought 4 per cent more food during the quarter, 6 per cent more transport services and 3 per cent more health services, outcomes described by UBS economist Scott Haslem as “positively unbelievable”...

The consumer inflation rate reported in the figures is zero in the March quarter and 1.4 per cent over the year. Household incomes grew 2.5 per cent in the quarter. Household savings was little changed at 9.3 per cent of income.

The best measure of spending by state shows NSW spending slipping a seasonally-adjusted 0.3 per cent in the quarter, Victoria advancing 1.8 per cent and Western Australia climing a phenomenal 7.8 per cent.

More reliable trend figures show NSW spending climbing 2.1 per cent per year and Victoria 1.9 per cent. In contrast Western Australian spending balooned 13.6 per cent - a faster rate of growth than in China’.

The news sent the Australian dollar to its highest close in a fortnight - 98.48 US cents. The share market inched ahead 0.29 per cent.

Describing the figures as “surprising to all” shadow treasurer Joe Hockey said they would be better with a better government.

“Imagine how well our country could do if we had a good government,” he told a press conference. “This is not the time to make conditions more difficult for the mining industry. It is not the time to put a new tax on the mining industry.”

Asked whether he was running a scare campaign Mr Hockey said “the scariest thing in Australia is Wayne Swan and quite frankly if you look at his words over the last few months he confirms it.”

“Today the Treasurer is suggesting that everything is very rosy in Australia, but he is handing out cash to people and telling people it is pretty tough out there, that’s the government is borrowing money - to hand you cash.”

In today's Canberra Times, Sydney Morning Herald and Age


These figures strain credulity - Tim Colebach

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