The Australian Q3 GDP Economy | Xtreamforex

Australian economy expands by 0.6%, a little softer than expected. The impacts of high inflation and higher interest rates are becoming apparent – notably, the real estate sector on lower turnover subtracted 0.2ppts from activity in the period.

The Australian economy expanded by 0.6% in the September quarter. That was a little softer than anticipated, market median 0.7% and Westpac 0.8%. Annual growth is 5.9%. The level of activity is 6.5% above levels prior to the pandemic, at the end of 2019.

The Real Estate sector – in the form of ownership Transfer Costs plunged by -11.2%, subtracting 0.2ppts from activity. We had allowed for a more modest fall, recent quarterly outcomes have been -1.1%, -2.5% and -2.1%. This provides further evidence that the Australian economy is in transition. Earlier tailwinds are fading, and the impacts of high inflation and higher interest rates are beginning to become apparent. A sharp economic slowdown is in prospect for 2023.

The National Accounts estimate that hours worked expanded by only 0.1% – even a touch softer than the Labor Force survey, which reported a rise of 0.2%. Supply constraints are a factor, with the economy going up against capacity constraints. In addition, in the September quarter, there was elevated sick leave and elevated levels of annual leave.

Domestic demand grew by 0.6% in the quarter. Net exports subtracted -0.2ppts from activity offset by a positive 0.2ppts contribution from total inventories. Of note, other inventories subtracted 0.2ppts from growth in the period. Home building activity advanced by a modest 1% in the quarter, with a 3.4% increase in new home building outweighing a 2.2% decline in renovation work. Business investment grew by 0.7%, with a lift in construction work outweighing a -3.0% decline in equipment spending.

Public demand is cresting at a high level, managing to post only a tepid 0.2% increase. This follows rapid growth up to the March quarter 2022, boosted by the response to pandemic.