Yesterday’s Australian Bureau of Statistics – Australian National Accounts – for the March-quarter 2014, shows that real GDP growth was 1.1 per cent, up from 0.8 per cent in the December-quarter 2013. The annualised growth rate of 3.2 per cent is an improvement on the 2.8 per cent from last quarter and is close to the trend rate between 2000 and 2008 of 3.3 per cent. Growth is being driven almost exclusively by Net exports with some help from household consumption and private investment, although the last two components are fairly subdued. The question is whether the boom in net exports in the Mining secotr in the March-quarter 2014 can be maintained. The signs are that it will taper somewhat in the second-quarter results given that the terms of trade are falling significantly and the export volumes that have been driven by strong growth in China are likely to decline as the Chinese economy slows. Overall, the data paints a fairly fragile picture for the Australian economy with not much sign of activity in the non-Mining sectors.

Today’s Australian Bureau of Statistics – Australian National Accounts – for the December-quarter 2013, shows that real GDP growth was 0.8 per cent, up from 0.6 per cent in the September-quarter 2013. The annualised growth rate of 2.8 per cent is an improvement on the 2.3 per cent from last quarter but still remains well below the trend rate between 2000 and 2008 of 3.3 per cent. Growth is being driven by household consumption, net exports, and public consumption and investment. Without the contribution of the government sector, overall growth would have been negative over the last two quarters. This contribution, while welcome, will not be sustained given the current political environment. Overall, the data paints a fairly subdued picture for the Australian economy for the last three months of 2013.

Today’s Australian Bureau of Statistics – Australian National Accounts – for the September-quarter 2013, shows that real GDP growth was 0.6 per cent, down from the (revised) 0.7 per cent for the June-quarter. The annualised growth rate of 2.3 per cent is now well below the trend rate between 2000 and 2008 of 3.3 per cent. This poor growth relative to trend is the reason the unemployment rate is rising. The stunning result is that the public sector contributed 1.5 percentage points to growth this quarter (a reversal from the June-quarter). This contribution, while welcome, will not be sustained given the current political environment. Overall, the data paints a fairly gloomy overall picture for the Australian economy. It ia hard to discern what the new Federal government is up to given that in 2 months we have already had four discrete statements about education policy, for example! But if their overall macroeconomic rhetoric is maintained and they start hacking into public spending to flex their conservative muscles then the outlook will shift very quickly from gloomy to disastrous and we will follow Europe down the sink hole.

Today’s Australian Bureau of Statistics – Australian National Accounts – for the June-quarter 2013, shows that real GDP growth was 0.6 per cent, up slightly from the revised 0.5 per cent for the March-quarter 2013 (previously published at 0.6 per cent). The annualised growth rate of 2.6 per cent is now well below the trend rate between 2000 and 2008 and there is now a 4.3 per cent gap between actual growth and trend. This will widen in coming quarters and it is the reason the unemployment rate is rising. Overall, the data paints a fairly gloomy overall picture for the Australian economy. Gloomy without being disastrous. However, if the new federal government (after Saturday) start hacking into public spending to flex their conservative muscles then the outlook will shift very quickly from gloomy to disastrous and we will follow Europe down the sink hole.

Today’s Australian Bureau of Statistics – Australian National Accounts – for the March-quarter 2013, shows that real GDP growth was 0.6 per cent, unchanged from the Dcember-quarter 2012. The annualised growth rate of 2.4 per cent is now well below the trend rate between 2000 and 2008 and there is now a 4.2 per cent gap between actual growth and trend. This will widen in coming quarters and it is the reason the unemployment rate is rising. The stunning reversal of fortunes in the leading mining state of Western Australia is a feature of today’s data release. It is now in recession. The strong mining states (WA, NT) are now converging on the poorly performed East Coast economies. Much is being made of the contribution of Net exports (1 percentage point) but most of that (0.7 points) arose from a decline in imports as a result of the collapse in capital goods investment (mining related). Public Investment also dragged growth by 0.9 percentage points indicating that fiscal austerity is a major reason for the output gap. Overall, the outlook is decidedly ugly.

The Australian economy grew in trend terms by 1 per cent in the December-quarter 2011, 0.9 per cent in the March-quarter 2012, 0.8 per cent in the June-quarter 2012, 0.7 per cent in the September-quarter 2012, and in today’s Australian Bureau of Statistics – Australian National Accounts – data covering the December-quarter 2012, the real GDP growth figure was 0.6 per cent. Further, the two main growth drivers in the December-quarter – Net exports (0.6 percentage points) and Public Investment (1.1 percentage points) – will not endure. Outlook: poor. But the irony is that while the Federal government is doing its best to undermine the economy by imposing fiscal austerity, it was the public corporations at the State/Local government level that provided the public capital infrastructure boost. Without this government spending support, the Australian economy would be in a deepening recession! I wonder what those who say that public spending undermines growth would say today! Gravity denial would be out in full force. I will keep my ears peeled and report back on the more ingenious contributions. While the spin is that the economy grew at 3 per cent over 2012, which is true, the forward-looking assessment is that the national growth rate is running around 2 to 2.5 per cent and falling, which is already well below trend. Employment growth was flat and real net national disposable income fell sharply in the December-quarter. The terms of trade, which has been helping to drive growth in the external sector also fell sharply. The State and Territory Final Demand data also shows that the East Coast and South Australia area, where the vast majority of the population lives and seeks work is now in recession. The outlook is decidedly negative.

In my assessment of the June-quarter 2012 National Accounts data the title indicated my assessment of where the economy was heading – Australian real GDP growth weakens and there is worse to come. Well, the worse to come came today with the release by the Australian Bureau of Statistics of the – Australian National Accounts – for the September 2012 quarter. The Australian economy continued to decline in the September-quarter and the trend is firmly down. The latest data available suggests that the slowdown in September (now officially revealed) has accelerated into the December-quarter, which is consistent with the trend shown in today’s data release. Today’s data release is now revealing for the first time the damaging impact of the fiscal austerity that the Government is pursuing. The government contribution to real GDP growth in the September-quarter was -0.5 percentage points, which totally nullified the positive contribution from private investment. A reasonable assessment is that the national growth rate is running around 2 to 2.5 per cent and falling, which is already well below trend. Employment and real net national disposable income are falling and the outlook is decidedly negative. As the former governor of the RBA said yesterday – fiscal policy is “just plain dumb” at present.

When the March-quarter National Accounts data came out it showed very strong growth which seemed to run counter to the other indicators that were available at the relevant time. My blog – Australian national accounts – strong growth creates a puzzle – focused on the conflict between the poor employment growth and the strong GDP growth. Today – the Australian Bureau of Statistics released the – Australian National Accounts – for the June 2012 quarter and the results make much more sense. The Australian economy slowed in the June quarter and the growth performance was more consistent with the other indicators that we have at our disposable. The latest data available suggests that the slowdown in June has accelerated into the third-quarter but we will have to wait until December to verify that claim. Today’s data release also continues to demonstrate the growth impact of on-going budget deficits even if the Federal Government is doing what it can to undermine that contribution. Without the public sector contribution to real GDP growth, the overall outlook would look very weak.

The ABS released the – Australian National Accounts – today for the March 2012 quarter and the results have stunned all commentators including yours truly. Last quarter, the real GDP growth rate had slumped to 0.6 per cent (this was revised upwards from 0.4 per cent). But in the March 2012 quarter the Australian economy grew by a staggering (fast) 1.3 per cent – driven by both private consumption and private investment are driving growth. For the year, the Australian economy grew by 4.3 per cent which when compared to trend (around 3.25 per cent) suggests a boom. But over the same quarter, employment growth fell by 0.7 per cent and full-time employment fell by 0.2 per cent. That dislocation is very puzzling. There appears to be a divergence occurring between our real output performance and our labour market performance. More analysis is required to fully understand that divergence. Clearly, the data is also indicating that growth can be unbalanced (concentrated in space and particular sectors) which poses policy challenges. For now though, the real GDP growth estimates are good. It is likely we have seen the peak of the investment cycle though (as China slows) and that will have implications for income growth, and, hence, household consumption growth.