At the end of the mining boom, as resources sector investment has plummeted, Queensland consumers are nonetheless resilient, and their growing consumption spending has partly offset the adverse impact of the fall in investment on aggregate demand (see chart above based on yesterday’s ABS National Accounts data). As others have noted, the state final demand numbers reported yesterday do not include exports, and we know that LNG is starting to boost Queensland exports. However, my feeling is that the 0.8 per cent contraction in State Final Demand Queensland has seen in June quarter is too large to be reversed by a boost to exports. That said, we should wait for Queensland Treasury to update its State Accounts estimates to conclude whether the Queensland economy contracted in June quarter. Even if it has contracted, it is a contraction associated with a fall in business investment from elevated heights that only ever could have been temporary. And it would be a contraction that, for now at least, Queensland consumers largely appear to be shrugging off.
See also Pete Faulkner’s commentary Q2 GDP disappoints.