National Economy

National economy

Trends: National economic growth is lower than long-term averages, showing a 1.0% growth rate per annum for the last year. On a per capita basis, this equates to a decline of 1.5% per annum.

Latest: The latest data points show a 0.2% growth rate for the second quarter of 2024, in line with 0.2% growth for the previous two quarters.

Data source: Data source: ABS Australian National Accounts: National Income, Expenditure and Product.

At the national level, Australian Bureau of Statistics (ABS) data shows a quarterly rise in Gross Domestic Product (GDP) of 0.2% for the second quarter of 2024, continuing the previous quarter’s trend and giving a 12 month rise of 1.0% (chain volume measures). GDP per capita fell 1.5% driven by the high levels of immigration over the previous 12 months. The ABS Australian National Accounts: National Income, Expenditure and Product, June release highlight the following points:

  • Household Consumption: Household consumption was weak, detracting 0.1 percentage points from GDP growth due to reduced discretionary spending. Household saving to income ratio remained at 0.6%.
  • Government Expenditure: Government consumption contributed 0.3 percentage points to GDP growth, driven by social benefits to households.
  • Public investment fell for the third consecutive quarter (-1.4%), mainly driven by state and local government, but still remains above long-term averages.
  • Dwelling investment rose by 0.1%, primarily due to a 2.5% increase in new houses as more homes were completed.
  • Net Trade: Net trade contributed 0.2 percentage points to GDP growth, with a rise in exports (+0.5%) and a fall in imports (-0.2%). The increase in exports was primarily fueled by a boost in education-related travel services. The terms of trade fell 3.0%.
  • Mining commodity prices for iron ore and coal declined due to lower global demand. However, non-mining sectors helped mitigate these losses through increased activity and reduced operating costs, particularly in Professional, Scientific and Technical Services, as well as Manufacturing.

See ABS for more info.

Data source: Data source: ABS Australian National Accounts: National Income, Expenditure and Product.

Business performance

The NAB Group Economics update for September 2024 shows that business conditions are still fluctuating below recent trends, but remain in line with long-term averages. Confidence partially rebounded from the August dip but remains well below long-term averages. NAB finds conditions due to capacity utilization and capital expenditure remaining high, and the employment sub-index returning to above average. Forward orders are still weak, but prices appear to be abating further. At an industry level, NAB reports that conditions rose notably in manufacturing (up 11pts), recreation & personal services (up 5pts), retail (up 5pts) and wholesale (up 4pts). Mining conditions have been reported to have fallen sharply, reversing the increase in August. Longer term trends point to different insights however, with long-term conditions weakest in manufacturing and retail, but positive in mining, transport & utilities, recreation & personal services, and finance, business & property.

Data source: NAB Group Economics

Household spending

The ABS Monthly Household Spending Indicator from August 2024 for New South Wales indicates:

  • An increase in household spending of +1.7% compared to August 2023 in current prices.
  • An increase in spending on services of +2.7% and on goods of +0.9% since August 2023 (current prices). Goods spending has fallen in recent months due to decreased spending on vehicles, motoring goods and food. Recent increases in services are mainly due to air and sea transport, and hospitality services.
  • An increase in discretionary expenditure of +1.2% and an increase in non-discretionary expenditure of +2.5% (current prices) since August 2023.

The consumer price index rose 2.7% in the 12 months to August 2024 (down from 4.3% in Nov 2023), but dropped 0.3% across all groups in the one month to August 2024. The annualised CPI is down from a peak of over 8% in December 2022, but still above long-term averages. Housing (+2.6%, compared to +6.6% in Nov 2023), food and non-alcoholic beverages (+3.4%, compared to +4.6% in Nov 2023), and alcohol and tobacco (+6.6%, compared to +6.4% in Nov 2023) have been the main drivers. Transport prices declined -1.1% over the year. Rents are still rising (up 6.8% in the previous 12 months), compared to new dwelling prices rising +5.1%. However, electricity prices have decreased -17.9% due to the launching of additional government rebates. The other main price declines were seen in automotive fuel (-7.6%), dairy products (-0.2%) and communications (-0.2%).

Data source: ABS Monthly consumer price index indicator

The ABS publishes specific price data on housing related expenses to give better insights (at the national level) into the price movements of purchases, rents and other expenses. Rents are still rising (up 6.8% in the previous 12 months). In comparison new dwelling prices have risen 5.1%. Electricity prices have fallen 17.9%, whilst gas and other household fuels have risen 3.2%.

Data source: ABS Monthly consumer price index indicator

A significant current challenge for housing is the need for a reduction in costs related to construction in order to ensure an adequate supply of building for a growing population. Construction price indices show that prices have stabilised since the start of 2023, with input prices for construction in Sydney rising 0.5% in the June quarter, mainly due to material (except steel) prices.

Data source: ABS Producer Price Indexes, Australia