Economy does better in December quarter but troubles ahead


“The economy has continued to grow and picked up through the year, however the rate of growth remains below the long run average,” he said.

Dwelling investment continued to fall, down 3.4 per cent in the quarter for its sixth consecutive drop.

However, there are signs the lift in the property market is under way with ownership transfer costs jumping by 12.3 per cent.

Of the 0.5 per cent lift in the quarter, household consumption accounted for 0.2 percentage points while inventories delivered a similar boost. Another 0.1 percentage points came from government spending.

The figures showed some concerning features for the Morrison government. Almost all measures of income fell through the quarter, with real net national disposable income per capita tumbling by 1.3 per cent.

Nominal GDP, an important measure for the budget, also fell by 0.3 per cent.

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Total private investment contracted by 1.7 per cent in a sign businesses were already concerned about their outlook before the twin hits of fire and virus.

The household spending ratio declined to 3.6 per cent after being boosted in the September quarter by the government’s personal income tax cuts.

Most economists believe the March quarter national accounts will show the economy contracting with growing concerns the coronavirus could drive the country into recession by the middle of the year.



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