Peter Costello

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National Accounts: September Quarter 1998



Today’s National Accounts demonstrate the remarkable resilience of the Australian economy to the weaker world economy.

GDP rose by a very strong 1.0 per cent in the September quarter and by 5.0 per cent through the year to the September quarter. This outcome is consistent with the forecasts for solid economic growth in 1998-99 as a whole and should underpin further employment growth.

Australia’s growth rate over the past year compares exceptionally well with the economies in the region – nearly all of which are in recession – and is stronger than the growth in the United States, the major economies in Europe and the OECD average.

The latest National Accounts continue to highlight the sound fundamentals of the Australian economy with subdued price pressures, moderate wages growth, solid productivity performance and healthy corporate profits. These fundamentals have supported robust domestic demand growth in the September quarter, with strong growth in household consumption and a sharp rebound in business investment growth.

A number of other indicators provide evidence of continued strength in domestic economic activity. Retail sales grew by 0.8 per cent in October while employment rose by 90,000 over the three months to October. Measures of business confidence have risen in recent months after falling earlier in the year.

Net exports contributed 0.2 percentage points to growth in the September quarter. Australian exporters are continuing their success in diverting sales away from weaker markets in East Asia to markets in North America, Europe and other parts of Asia.

Growth in the September quarter occurred across a range of industries. Particularly strong growth was recorded in the accommodation, cafes and restaurants, finance and insurance and wholesale trade industries. The manufacturing sector recorded growth of 0.9 per cent in the quarter, while the agricultural sector grew by 1.0 per cent.

The Accounts provide continued evidence of subdued price pressures, with the household consumption deflator rising by 0.3 per cent in the September quarter and by 1.8 per cent through the year, broadly in line with the underlying CPI inflation rate.

2 December 1998

2 Dec 1998

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