NO.075

NATIONAL ACCOUNTS: SEPTEMBER QUARTER 2002

Today’s National Accounts release shows that the Australian economy continued

to perform exceptionally well in the September quarter, considering the effect

of drought. Australia’s GDP rose by 0.9 per cent in the quarter and

by 3.7 per cent over the year.

The strong growth was underpinned by a solid increase in private investment.

Overall spending continued to grow strongly in the quarter, and domestic final

demand increased by around 6 per cent over the year.

Private business investment increased by 2.9 per cent in the September quarter,

following strong growth in the previous quarter, to be 12.2 per cent higher

than a year ago. Private business investment was boosted by an increase of almost

40 per cent in new engineering construction over the past year. The

good investment outcome is consistent with recent capital expenditure surveys,

which point to expected strong growth in business investment in 2002-03. Dwelling

investment also continued to grow strongly in the quarter, increasing by 3.3 per

cent to be up by more than 22 per cent through the year.

Household consumption grew moderately in the quarter, although increased by

a solid 4.2 per cent over the past year, supported by solid employment growth.

The effects of the drought were evident in the sharp declines in agricultural

production and farm income in the quarter. Agricultural production fell by 12.2

per cent in the September quarter. Exports fell, in part due to the drought

and the weak global environment. Nevertheless, several non-farm sectors grew

strongly in the quarter. The largest increase in production was in the construction

industry, with wholesale trade and property and business services also making

a substantial contribution to growth.

Income growth was strong in the September quarter. Compensation of employees

increased by 2.1 per cent in the quarter, and corporate gross operating

surplus increased by 1.6 per cent to be 9.2 per cent higher than a year

ago. However, gross mixed income fell by 1.7 per cent in the quarter, reflecting

the effects of the drought.

The September quarter National Accounts show that inflationary pressures in

the Australian economy remain moderate. The household consumption chain price

index – a broader measure of price increases than the CPI – rose by 0.7 per

cent in the quarter and 2.8 per cent through the year. Non-farm average earnings

increased by 1.4 per cent in the September quarter and by 3.4 per cent

through the year.

The good outcomes in the September quarter National Accounts again demonstrate

the resilience of the Australian economy. The Australian economy continues to

outperform the major industrial economies of the world despite the substantial

drag on growth from the drought.

CANBERRA

4 December 2002