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Business investment boosts Australia's economy

Business investment boosts Australia's economy

Scott Morrison told reporters Australia's growth rate is among the best of the advanced world.

Wednesday's data from the Australian Bureau of Statistics showed the gross domestic product (GDP) grew by 0.6 percent in the third quarter, slowing from the previous quarter when it rose 0.9 percent.

Australia's economic growth was driven by both the public and private sectors last quarter.

"Today's print is not a good number", a JP Morgan economist, Sally Auld, said.

State final demand, which measures the domestic side of the economy, grew by 0.9 per cent in the quarter.

But household consumption grew by just 0.1% in the quarter and is tracking weak growth levels not seen in nearly a decade.

Aussies were cutting back spending on household furnishings and equipment, hotels, cafes and restaurants, clothing and footwear and buying new cars.

Some of that spending had to be funded by saving less, with the savings ratio down at a lowly 3.2 percent compared to around 7 percent just three years ago. Average labour earnings increased by just 0.3% in the quarter and 0.6% over the year, and household disposable income rose by just 0.5% and 1.8% over the year, barely above the rate of inflation.

Blumenthal: Trump may be guility "of obstruction of justice"
To charge a president with obstruction based exclusively on such actions, he claims, would cause a "constitutional crisis ." . It is however, important to note that the impeachment process is more of a political one , not a criminal one.

Bill Evans, chief economist at Westpac, said pressure is building on consumers and it is forcing a change in spending patterns that threatens to choke off growth. The -0.1% drop in dwelling investment in the September quarter - the third decline in a row - was due to a 4.8% fall in alterations and investment.

But a cloud still hangs over the Australian consumer, with record household debt, years of record-low wages growth, and, more recently, softening house prices.

"This government's strategy has supported jobs by driving investment that in the September quarter created more than 1000 jobs every day", he said.

Growth in household spending is now at its lowest rate since the March quarter in 2005. "We believe it will", said Paul Dales, chief economist at Capital Economics.

About 17 out of 20 industries recorded growth during the quarter, underlining the improvement in business conditions and corporate earnings over the a year ago.

"We have now seen four consecutive quarters of investment growth, following 12 consecutive quarters of decline".

The economy was mainly bolstered by private investment, mostly non-residential construction.

"Business conditions, as surveyed, are at their highest level in 20 years. our enterprise tax plan is a key part of this, which is why it must be supported".


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