Economy grows 1.1 per cent in December quarter

The Australian economy recorded broad-based growth of 1.1 per cent in seasonally adjusted chain volume terms in the December quarter 2016, a rebound from the previous quarter’s decline of 0.5 per cent, data from the Australian Bureau of Statistics (ABS) shows. Australia’s Gross Domestic Product (GDP) has now grown 2.4 per cent through the year.
Growth was recorded in 15 out of 20 industries. Strongest growth was observed in Mining, Agriculture, forestry and fishing, and Professional scientific and technical services, each industry contributed 0.2 percentage points to GDP growth.

Household final consumption expenditure contributed 0.5 percentage points to GDP growth. Net exports contributed 0.2 percentage points. Public and private capital formation both contributed 0.3 percentage points this quarter after both detracted from GDP growth last quarter.

The Terms of trade grew by 9.1 per cent in the December quarter due to strong price rises in Coal and Iron ore. The terms of trade is now 15.6 per cent higher than December quarter 2015. Nominal GDP grew by 3.0 per cent to be 6.1 per cent higher through the year. Real net national disposable income increased by 2.9 per cent for the quarter.

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The strength in commodity prices helped drive a 16.5 per cent increase in Private non-financial corporation’s Gross operating surplus. Compensation of employees decreased 0.5 per cent for the quarter to be 1.5 per cent higher through the year. This is in line with the subdued wage price index (1.9 per cent through the year) and employment growth (0.7 per cent through the year) previously published by the ABS.