National Economy

National economy

Trends: National economic growth has slowed, showing a 1.1% growth per annum for the last year. On a per capita basis, this equates to a decline of 1.3% per annum.

Latest: The latest data points show a 0.1% growth for the first quarter of 2024, down from a 0.3% growth for the last quarter of 2023.

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 0.1% for the first quarter of 2024, continuing the previous quarter’s trend and giving a 12 month rise of 1.1% (chain volume measures). GDP per capita fell 1.3% 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:

  • Domestic demand has remained strong and been a primary upward driver of growth, providing a 0.2% increase in the quarter. This is despite elevated prices, particularly in services due to elevated labour costs.
  • Consumption was the principal contributor (0.4% growth contribution), with government consumption increasing by 1.0% and household consumption increasing by 0.4%.
  • Capital investment detracted 0.2% points from GDP growth. Public (-0.8%) and private (-0.9%) investment both fell.
  • Net trade continued to drag on GDP growth, detracting 0.9% from GDP. There was a 0.7% increase in exports, outweighed by a 5.1% increase in imports.
  • The household saving to income ratio declined from 1.6% to 0.9%.
  • Household spending rose 0.4% in chain volume measures in the quarter. Households continued to increase expenditure on essentials (including electricity, medical and rent).
  • Compensation of employees rose 1.0%, a significantly lower amount than previous quarters (down from 3.3% in the September 2022 quarter).
  • Weak commodity prices and subdued demand have led to a decline in mining gross operating surplus in the quarter.

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 May 2024 shows:

  • Business conditions have fallen to just below long run averages for both NSW and Australia. Declines in conditions were led by consumer facing services and construction, resulting from the tightening of household discretionary expenditure.
  • Business confidence measures have been more mixed. Both state and national levels saw a large dip in the most recent data, offsetting gains in April. NSW data has been bouncing between positive and negative territory, whilst Australian data shows the first negative value for 2024. The indicators both remain well below long-run averages.

Data source: NAB Group Economics

Household spending

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

  • An increase in household spending of +3.0% compared to April 2023 in current prices.
  • An increase in spending on services of +6.7% and a decrease on goods of -1.4% since April 2023 (current prices), continuing previous trends.
  • An increase in non-discretionary expenditure of 5.9% with a fall for discretionary expenditure of -0.3% (current prices), also continuing previous trends.

The consumer price index rose 3.6% in the 12 months to April 2024 (down from 4.3% in Nov 2023). This is down from a peak of over 8% in December 2022, but still well above long-term averages. Housing (+4.9%, compared to +6.6% in Nov 2023), food and non-alcoholic beverages (+3.8%, compared to +4.6% in Nov 2023), transport (+4.2%) and alcohol and tobacco (+6.5%, compared to +6.4% in Nov 2023) have been the main drivers. Rents are still rising (up 7.5% in previous 12 months), compared to new dwelling prices rising +4.9%, and electricity rising +4.2%. The main price declines were seen in Holiday travel and accommodation (-6.2%) and gas and other household fuels (-3.5%). The main price declines were seen in Holiday travel and accommodation (-6.2%).

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) about the price movements of purchases, rents and other expenses. Rents are still rising (up 7.5% in the previous 12 months). In comparison new dwelling prices have risen 4.9%. Electricity prices have risen 4.2%, whilst gas and other household fuels declined 3.5%.

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 adequate supply of building for a growing population. The large price increases prior to 2023 have caused many bankruptcies in the sector. Construction price indices (data for Sydney) show that prices have stabilised since the start of 2023, providing more certainty to the sector going forward. The ABS reports that input prices to construction rose 0.4% in the March quarter, mainly due to material prices.

Data source: Producer Price Indexes, Australia