In his latest column, Stormy times for an economy in the doldrums, Ross Gittins refers to Queensland’s “below-par” growth in State Final Demand, one of the statistics released by the ABS last Wednesday as part of the March quarter National Accounts. Certainly, the domestic drivers of growth in Queensland, such as consumption and investment expenditures, which are measured in State Final Demand, are growing well below average. My old friend and former Treasury colleague Joe Branigan, now Senior Associate at Cadence Economics, alerted me to this the other day, and provided the handy chart below, which shows just how below-par State Final Demand growth has been in Queensland.
- State Final Demand growth is well below the long-run average (1.77% v 4.04%)
- The only sectors that are materially beating the long-run average are:
- Electricity, gas and other fuel; i.e. power bills (Year to March 2017 growth = 6.5%, long-run average = 3.2%)
- Commonwealth public corporations; presumably the NBN (Year to March 2017 growth = 28.5%, long-run average = 1.0%)
I should note State Final Demand is the sum of the domestic sources of demand in a State economy. It does not include exports or subtract imports, and is hence not a true measure of State economic performance. The Queensland economy has been performing better than State Final Demand data have suggested recently, due to growing exports, particularly of LNG. But, even so, it is clear from the chart in my last post that GSP growth has been running at below its long-run average, too:
Queensland’s stellar export performance has helped our economy immensely, but given weaknesses in domestic drivers, arguably the economy has merely survived, rather than thrived.
Also see Pete Faulkner’s commentary on the latest National Accounts: