By Nick Mann | 5 December 2012
Growth in the Australian economy fell to 0.5% in the three months to the end of September as household consumption slowed and government spending fell, the Australian Bureau of Statistics announced today.
The figure represents a continued deceleration in growth from 1.3% in the first quarter and 0.6% in the second. The Australian economy was 3.1% bigger at the end of September than it was a year previously – compared with 3.7% in the previous quarter.
Public spending fell by 8.2% over the third quarter, knocking 0.4% off gross domestic product, while consumer spending increased by just 0.3% (adding 0.2%), compared with 0.7% the previous quarter.
The rise in output was largely driven by spending on machinery and equipment, amounting to 0.4% of GDP. Mining production also contributed 0.4%, with output increasing by 4.5% over the quarter.
Australian treasurer Wayne Swan said the ‘solid’ growth figure demonstrated the resilience of the country’s economy in the face of a ‘difficult and volatile’ global economic environment and in particular in light of a sharp fall in commodity prices.
‘While conditions remain patchy in some parts of the economy, growth in the quarter was reasonably broad-based, underpinned by strong business investment, modest household consumption, a lift in exports and an accumulation of inventories.
‘ There were also encouraging early signs of an improvement in housing investment. There was positive growth in all private expenditure components, with only public demand declining.’
Swan added that the overall growth showed that the government’s fiscal consolidation programme was being more than offset by growth in the private sector.
