Economy grew 0.2 per cent in December quarter

The Australian economy grew 0.2 per cent in seasonally adjusted chain volume terms in the December quarter 2018, according to figures released by the Australian Bureau of Statistics (ABS) today.

Chief Economist for the ABS, Bruce Hockman, said: “Growth in the economy was subdued, reflecting soft household spending and a decline in dwelling investment. The approvals for dwelling construction indicate that the decline in dwelling investment will continue.”

Household spending grew by 0.4 per cent, reflecting a continuation of modest spending in recent quarters. Investment in dwellings fell 3.4 per cent.

Falls in private investment dampened growth in the quarter. This was consistent with the decline in construction industry value added, falling 1.9 per cent. Services industries supporting construction activity detracted from growth with professional scientific and technical services industry value added declining for the first time in three years. Mining investment fell in the quarter as significant projects transitioned from the construction to the production phase. This is reflected in oil and gas production, which grew 7.7 per cent.

Public demand sustained growth in the quarter. Public investment remained at high levels with State and Local government growth of 6.3 per cent reflecting continued work on a number of large infrastructure projects. Government final consumption expenditure grew 1.8 per cent, with ongoing expenditure in health, aged care and disability services. This investment translates to ongoing strength from the healthcare industry, which remains the largest contributor to economic growth.

Mr Hockman said “As the economy transitions out of the mining boom, investment has remained strong with major public works driving growth around Australia.”

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