Australian economic activity rose 3.3 per cent in seasonally adjusted chain volume terms in the September quarter 2020, according to figures released by the Australian Bureau of Statistics (ABS) today.
Head of National Accounts at the ABS, Michael Smedes said: “Following the record 7.0 per cent decline in the June quarter, Australia experienced a partial recovery in the September quarter. As a result, economic activity fell 3.8 per cent through the year to September quarter.”
Reduced COVID-19 case numbers resulted in an easing of social distancing measures and trading restrictions across most states and territories during the September quarter. Victoria was the exception, with the state implementing stage 4 restrictions in early August due to a spike in COVID-19 cases. The ABS published a series of spotlight articles to highlight the impacts of COVID-19 on the economy this quarter.
Household spending drove the economy, rising 7.9 per cent due to increased spending on both goods and services. Spending on services rose 9.8 per cent, driven by spending on hotels, cafes and restaurants, health and recreation and culture as containment measures were relaxed. The easing of restrictions also increased demand for goods, which rose 5.2 per cent. Victoria’s household spending fell 1.2 per cent, the only state to record a fall, as tighter restrictions were imposed. Mr Smedes added: “Despite record quarterly growth in household spending, the level in September quarter was 6.8 per cent lower than that recorded in December Quarter 2019”.
Compensation of employees rose 2.3 per cent as hours worked increased. Part-time employment also rose. The household saving to income ratio remained elevated at 18.9 per cent, a slight fall from 22.1 per cent in June quarter when household spending collapsed.
Net trade detracted 1.9 percentage points from GDP, the largest detraction since September quarter 1980. Imports of goods and services rose, predominantly reflecting increased demand for consumption goods as restrictions lifted. Exports of goods of services fell, as a result of weaker demand for Australian mining commodities and constraints on travel.