Australian National Accounts: National Income, Expenditure and Product, June 2024 (2024)

Unless otherwise stated all figures are in seasonally adjusted, chainvolume measures.

The reference year for chain volume measures is 2021-22.

Gross Domestic Product (GDP) rose 0.2%, the eleventh consecutive quarter of growth. The Australian economy grew 1.5% in 2023-24, the weakest annual growth (excluding the COVID-19 pandemic) since 1991-92, a year that included the gradual recovery from the 1991 recession.

The weak growth reflects subdued household demand, which detracted 0.1 percentage points from GDP growth while government consumption contributed 0.3 percentage points, the same contribution to growth as previous quarter.

Nominal GDP rose 0.2%. The GDP implicit price deflator (IPD) was flat in the June quarter, as the increase in domestic prices were offset by falls in export prices relative to import prices.

The Domestic final demand IPD rose 0.9% in the June quarter and 4.6% in the 2023-24 year. High construction prices and skilled labour shortages continue to drive growth in the series, but the prices have softened from the peak in 2022-23 (+6.6%).

The terms of trade fell 3.0% due to falls in export prices relative to import prices. Mining commodity prices fell for a second consecutive quarter, influenced by reduced global demand for iron ore and coal. Import prices were unchanged from the previous quarter as price rises for transport freight were offset by lower oil prices.

Domestic final demand contributed 0.2 percentage points to GDP growth.

Household consumption was weak and detracted 0.1 percentage points from GDP, due to reduced discretionary spending.

Government expenditure contributed 0.3 percentage points, driven by continued strength in social benefits to households.

Investment had no contribution to growth, as net transfers of second-hand assets resulted in a detraction from total private investment (-0.1 percentage points) and was offset in public investment (+0.1 percentage points).

Net trade contributed 0.2 percentage points to GDP, with a rise in exports (0.5%) and a fall in imports (-0.2%).

Changes in inventories detracted 0.3 percentage points from GDP, with a smaller build-up in inventories compared to the March quarter. Manufacturing and Wholesale trade inventories experienced a run down from increased sales of fertilisers inventories imported in March.

Household consumption (-0.2%) fell to the weakest growth rate since the Delta-variant lockdown affected September quarter 2021.

Discretionary spending fell 1.1%, following a rise in March. The fall was driven by services and partly offset by goods. Transport services (-4.4%) and hotels cafes and restaurants (-1.5%) were the largest detractors, reversing their strength in March, though remain at elevated levels. Furnishings and household equipment (+4.0%) drove the rise in discretionary goods and was the largest positive contributor to total household consumption. Spending on household electrical purchases coincided with end of financial year sales, which also saw increased imports of household electrical items (+16.0%).

Essential spending increased 0.5% in the quarter. Rent and other dwelling services led the rise in line with continued population growth. Electricity, gas and other fuel (+2.4%) rose due to a reduction in electricity rebates provided during the quarter, alongside increased demand for heating due to a cooler June period. Spending on food (-1.0%) fell as households substituted to affordable options to reduce grocery expenses.

Excluding the impacts of second-hand asset transfers, public investment (-1.4%) fell for the third consecutive quarter but remains at elevated levels. State and local government continued to lead the fall, as work done on existing transport and health projects moved towards completion.

Private investment increased 0.4% (excluding the impacts of second-hand asset transfers). Non-dwelling construction contributed to the rise due to work done on various mining projects and the commencement of datacenters around the country. Machinery and equipment partly offset the rise as adverse business conditions delayed investment on non-essential capital purchases.

Dwelling investment increased 0.1%, driven by new houses (+2.5%) as an increased number of homes reached completion following recent bottlenecks due to labour shortages, particularly in the finishing trades. Ownership transfer costs (+3.9%) continued to rise due to continued turnover in the property market.

Net trade contributed 0.2 percentage points to GDP growth as exports (+0.5%) grew and imports (-0.2%) fell modestly.

This rise in exports was driven by services from increased education related travel services. Expenditure by international students was above the June quarter average, following subdued spending in March and December. Exports of goods partly offset the rise with reduced international demand for non-monetary gold and lower exports of rural goods driven by weak cereal grain harvests.

The fall in imports was led by goods. Imports of machinery and industrial equipment, and processed industrial supplies drove the falls after large volumes were imported in March. Imports of services partly offset the falls, driven by travel and other services. The rise in travel services reflected increased travel spend, as Australian residents spent more time overseas in nearby destinations including Indonesia, Japan and Thailand.

Gross value added (GVA) rose 0.3% this quarter, with rises in 13 out of 19 industries.

Service industries drove the rise in the June quarter with Information Media and Telecommunications (+1.6%), Professional, Scientific and Technical Services (+0.4%), and Transport, Postal and Warehousing (+0.6%) experiencing growth.

Non-market industries experienced their seventh consecutive quarter of growth in line with demand for essential services. Health Care and Social Assistance (+0.4%) rose with increased GP attendance and demand for pathology services from an earlier start and virulent flu season. Public Administration and Safety (+0.6%) and Education and Training (+0.6%) also rose in the quarter.

Mining (-0.3%) was the main detractor from growth in the June quarter, with adverse weather affecting coal and LNG production, offset by increased iron ore production. Arts and Recreation Services (-0.8%) and Accommodation and Food Services (-0.3%) fell from strength after large scale music and sporting events saw increased activity in these industries in the previous quarter.

Gross operating surplus (GOS) fell 0.6%. Private non-financial corporations (-2.8%) led the fall as Mining GOS (-7.8%) declined for the second consecutive quarter. Mining commodity prices fell across iron ore and coal due to decreased global demand. Non-mining industries partly offset the falls with increased activity and reduced operating expenses for industries including Professional, Scientific and Technical Services and Manufacturing.

Financial corporations GOS (+1.0%) rose due to increased margins and growth in loan and deposit balances. Mortgages transitioning from low fixed interest rates onto higher variable rates continued in the June quarter, although to a lesser extent than previous quarters. Growth in balances was driven by dwelling loans inline with increased loan commitments from previous quarters, while deposit balances saw softer growth amid higher cost of living.

Dwellings owned by persons GOS increased 2.7% supported by strong ongoing demand for housing.

Compensation of employees (COE) increased 0.9%, and 7.5% for 2023-24 the financial year, following the peak 10.1% growth in 2022-23. While the labour market remained tight, there are indications that competition for labour began to ease, seen through gradual slowing in Wage price index growth from the September quarter 2023 peak. Growth in hours worked (+1.1%) is the strongest since the previous June, as full-time employment increased 0.8% after three quarters of weak growth relative to part-time employment.

Private COE (+0.7%) led the rise due to rises in wages, bonuses and headcounts in industries such as Professional, Scientific and Technical Services and Construction. Public COE rose +1.4%, following a strong 2.1% rise in March, reflecting the full implementation of the new APS wide enterprises bargaining agreement which began in the month of March.

The household saving to income ratio remained at 0.6%, as growth in gross disposable income outpaced growth in nominal household consumption.

Gross disposable income rose 0.9% as gross income (+$7.8b) outpaced income payable (+$4.0b). Compensation of employees (+1.0%) was the main contributor to growth in income receivable, while income tax (+3.1%) drove the rise in income payable.

Nominal household final consumption expenditure (+0.7%) detracted from household saving as prices for essential and discretionary services continued to rise.