GDP figures show an economy on the edge
6 Sep 2023|
The Australian economy remained sluggish over the past quarter, with productivity continuing to contract, raising concerns of a looming serious downturn.
National accounts data released today by the Australian Bureau of Statistics shows gross domestic product (GDP) growth limping at just 0.4 per cent in the June quarter, following growth of 0.4 per cent in the March quarter. Overall, the economy has grown 2.1 per cent for the year.
“Economic activity remains subdued, with a pronounced slowdown in growth since the beginning of the year,” ACCI chief executive officer Andrew McKellar said.
GDP per hour worked fell a further of 2 per cent in the June quarter, with an overall decline of 3.6 per cent recorded for the year.
“When productivity is contracting sharply, the last thing that our economy needs is ill-conceived and unnecessary changes to our industrial relations system, guaranteeing further pain for Australians,” Mr McKellar said.
“The industrial relations changes will reduce flexibility in the workplace, acting as a dead weight on our economy. This will only serve to further slow the economy and drive it closer to recession.”
Also, of significance is the slowing in GDP per capita, which contracted by 0.3 per cent in June, following a fall of 0.3 per cent in March.
Household consumption remains very weak, rising 0.1 per cent in the June quarter. Consumers are reining in their spending in the wake of increasing prices, particularly food, rent, insurance and holiday travel, as well as rising mortgage interest rates.
In some positive news, business investment in machinery and equipment is up 4.3 per cent for the year.
Labour costs continue to rise strongly, with wages, bonuses, superannuation and other employee incentives rising a further 1.6 per cent in the June quarter, a total of 9.6 per cent for the year.
The strength of the labour market will be difficult to sustain. There is a real risk that we could see unemployment rising in the months ahead.