The latest National Accounts released by the ABS were better than expected, with the national economy growing at 0.6% in December quarter 2015 and 3% through-the-year. Regarding Queensland, state final demand barely moved with a 0.1% increase, but that does not include net exports which likely would have added to economic growth that quarter. It was good to see that the slide in State and Local Government capital expenditure has been reversed, and it is now helping the Queensland economy endure the end of the mining boom and the big reduction in private sector capital expenditure associated with it (see chart below). As the ABS noted regarding the Queensland estimates:
Public gross fixed capital formation increased 9.3% largely due to a rise of 12.3% from State and local General government.
In summary, the data were more positive than I expected but I remain concerned about the sustainability of Queensland State and local government capital expenditure given budgetary pressures.