Fantastic December quarter result for Qld economy

The December quarter National Accounts showed a strong rebound for the Australian economy, with economic growth at 1.1 percent for the quarter, while State Final Demand for Queensland grew at 0.9 percent over the quarter according to the ABS. (Note the GSP result for December quarter should be even better as it will include net exports which are not included in the State Final Demand estimates published today.) As the decomposition in the chart below shows, this was driven by growth in household consumption spending and general government investment spending (e.g. the State Government’s regional capital works programs, which appear to be having a strong economic impact, although the jobs impact is likely less than the Government is currently claiming, as I discussed in my previous post).

sfd_dec16

 

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4 Responses to Fantastic December quarter result for Qld economy

  1. robsonap0 says:

    GDP seems to be on B B Berocca, which gave it B B Bounce! Seriously though, many partial indicators did show the national economy in the last quarter to be improving. Trend GDP growth – the measure statistical grown ups use – did fall again in the Dec Qtr to 1.9%, but I suspect 2017 will be a good year for the Economy. Watch Saving rates and retail spending PLUS hours worked and hence wages growth in the labour market in 2017. What can Trump such confidence?

  2. The Happy Hillbilly says:

    Hmm – not so sure about the state of the economy. The headline figures looked good but we seem to have started developing a curious situation where growth in headline GDP does not translate into positive economic outcomes as experienced by John and Jane Average. And this theme began some time ago and has been growing more pronounced.

    Economy-wide employment outcomes remain subdued with part-time jobs beginning to replace full-time and we know this situation has continued through into the early parts of the current quarter.

    Wage and salary growth has continued to trend weaker and went negative over the December quarter.

    And while household consumption was the big driver of this result, it appears to have been very concentrated. Profits in retail and related sectors – where workers typically spend much of their incomes – went backward over the quarter (as did wages in those sectors). The growth was mainly in “luxury” type goods such as furnishings – related to the ongoing boom in Sydney and Melbourne investment property perhaps?

    In any case, I feel we should temper enthusiasm a little until we see solid evidence of economic growth flowing into employment, wages and consumer spending more broadly. Until that happens I’ll consider the growing disconnect between headline GDP and the on-the-ground outcomes being experienced by the typical punter.

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