Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)
Australia started its 27th year of unprecedented economic expansion, posting the strongest annual growth rate in 15 months.
Treasurer Scott Morrison labelled the September quarter national accounts “another encouraging set of numbers”, noting that at 2.8 per cent, the annual growth figure stands above the average of other advanced economies.
“This puts Australia back up towards the top of the pack,” Mr Morrison told reporters in Canberra on Wednesday.
Australian Chamber of Commerce and Industry chief economist Adam Carr said the acceleration in growth supports his belief the labour market will continue to improve.
“The jobs market should remain strong, providing much-needed support to household incomes growth,” he said.
The economy grew by 0.6 per cent in the quarter after an upwardly revised 0.9 per cent increase in the previous three months.
This was the result of stronger business investment and construction, especially engineering construction.
The wage bill across the economy also grew by a solid 1.2 per cent in the quarter on the back of buoyant employment growth rather than growing individual pay awards, which remain otherwise subdued.
So far this year, Australia has experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, Mr Morrison said.
However, household consumption was “soft” even though October’s retail sales figures, released on Tuesday, showed some improvement.
“I would hope Australians are feeling in a position where they can go out and celebrate this Christmas and holiday season and I’m sure their kids are hoping they will be spending,” he said.
Shadow treasurer Chris Bowen said it was clear while businesses are feeling good, households certainly aren’t.
“Consumers are indeed feeling the strain,” Mr Bowen said.
“This is not surprising given workers are struggling to get a decent pay rise … and their debt levels have been rising much faster than their incomes.”
The annual growth rate of 2.8 per cent was up smartly from a revised 1.9 per cent previously, and partly reflected the 0.4 per cent growth contraction recorded in the 2016 September quarter dropping out of the equation.
Leaving the cash rate at a record-low 1.5 per cent on Tuesday, Reserve Bank governor Philip Lowe said he expected GDP growth to average around three per cent over the next few years.
Treasury will use the national accounts to refine its own forecasts for the mid-year budget review, which will be handed down by Mr Morrison later in December, although the treasurer declined to give a precise date at this stage.