Western Australia’s economy shrunk by 0.3 per cent in the June quarter, excluding international trade, according to the latest data from the Australian Bureau of Statistics, while GDP grew 0.8 per cent nationally.
Western Australia’s economy shrunk by 0.3 per cent in the June quarter, excluding international trade, according to the latest data from the Australian Bureau of Statistics, while GDP grew 0.8 per cent nationally.
Measured by state final demand, which includes government spending, consumption and investment, the state’s economy was 4.3 per cent smaller in the June quarter than the same period in 2016, in seasonally adjusted terms.
State final demand was $48.4 billion in the quarter, bringing the total to $244.8 billion for the financial year.
That’s the softest 12-month period since the year to September 2011.
The fall in the June quarter was driven by a decline in private investment, according to the ABS.
“Weakness in total non-dwelling construction and total machinery and equipment drove the fall (4.5 per cent quarter on quarter) in private (investment),” the ABS said.
“Public (investment) increased over the quarter driven by the general government sector.”
Household consumption and government recurrent spending contributed to growth.
However, consumption growth was subdued, at 0.5 per cent quarter-on-quarter.
The news comes ahead of tomorrow's state budget.
National numbers
Nationally, GDP growth was 1.8 per cent for the financial year overall.
Commsec chief economist Craig James said it was the completion of a 26th year of expansion for the national economy.
“In the US, analysts express economic growth in annualised terms, the quarterly growth rate is multiplied by four,” he said.
“In these terms, Australia is growing at a 3.3 per cent annualised rate.
“Now this is clearly not the case, growth has moved in a zig-zag fashion over the past year.
“For the 2016-17 year, the economy grew by 1.9 per cent.
“But the economic growth figures look backwards, not forwards.
“Looking ahead, the economy is gathering momentum with businesses making money, investing and hiring new workers.
“The global economy is also in better shape.
“And while home building is set to slow, its place will be taken by infrastructure spending – especially more roads, tunnels and railways.”
Mr James also said real gross national income, which takes account of profits and wages earned by Australians through overseas investment and employment, fell by 0.5 per cent in the quarter to be up 4.7 per cent year on year.
Treasurer Scott Morrison said better days were emerging for the national economy, and that it would be a positive contributor the national budget.
“In the two quarters of data that have now been released since the budget, our forecasts have proved to be close to, or even bettering the mark, like on jobs and unemployment,” he said.
“Also, the conservative approach we have taken to our assumptions on commodity prices has proven prudent, one of the reasons we have been able to maintain the confidence of ratings agencies.
“I anticipate that based on these figures and other indications, we will achieve a better than budgeted final year outcome for the underlying cash balance in the 2016-17 year.
“This solid result in today’s national accounts is not based on a reliance on one or two good stories within the economy, but strength that is more balanced across the board.
“Household consumption, new public final demand, net exports and new business investment all supported growth, offsetting declines in inventories and flat dwelling investment.”
The June quarter government budget data, also recently released by the ABS, would appear to back Mr Morrison’s assertion that the Commonwealth’s financial position was improving.
Revenue for the quarter of $118.4 billion was up 8.6 per cent on the same period in 2016.
Spending was up only 4.5 per cent, to $115.4 billion.
