(Australian Associated Press)
Australia’s economy put in a better than expected performance during the back end of 2019 with GDP growing 0.5 per cent in the December quarter.
The quarterly gross domestic product increase narrowly beat market consensus of 0.4 per cent growth with nnual growth accelerating to 2.2 per cent from 2.0 per cent in September quarter.
Australian Bureau of Statistics chief economist Bruce Hockman noted the rate of growth remains below the long run average, but CommSec chief economist Craig James was more upbeat.
He heralded the year-ending data as the 28th consecutive year of economic growth.
“The gloomsters will be disappointed, again,” he said.
“The record economic expansion continues.”
While the construction industry lagged during the quarter, consumer and government spending helped the economy, according to Mr James.
BIS Oxford Economics chief economist Sarah Hunter described momentum for 2019 as slow and steady.
“But conditions have clearly changed markedly since then,” she said.
“The coronavirus outbreak is putting a substantial strain on the global economy.”
The details of the GDP result show domestic demand remained subdued with 0.1 per cent growth in the December quarter.
A rise in household discretionary spending and continued increases in providing government services was offset by falls in home and business investment.
Household income remained steady.
Compensation of employees recorded its 12th consecutive rise, and increased by 1.0 per cent. This reflected a rise in the number of wage earners as well as a steady increase in the wage rate.
Australia’s bushfires and other weather-related events prompted a higher number of insurance claims, which contributed to household income.
The household saving to income ratio was 3.6 per cent.
This was affected by subdued consumption, steady increases in wages and more insurance claims.
The economy was boosted by the mining industry.
Production volumes grew by 1.6 per cent, strengthening through the year to 7.3 per cent. This was reflected in the growth in mining exports and inventories.
Falling prices for key export commodities impacted the terms of trade for the quarter, which fell 5.3 per cent.
This reduced nominal GDP, which fell 0.3 per cent, as lower coal, iron ore and gas prices contributed to more subdued company profits.
Mining profits declined 2.6 per cent for the quarter.
The Australian dollar edged slightly higher on the release of the data and was worth 66.04 US cents at 1224 AEDT.