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DWELLING INVESTMENT FALLS 1.4%
Dwelling investment fell 1.4% in the September quarter 2016 driven by New and Used Dwellings (down 1.6%) and Alterations and Additions (down 1.0%). The decline this quarter can be partly attributed to high rainfall levels. Through the year growth was still high at 7.2% and Private sector residential building approvals were more than $20.4b in original current price terms for the quarter, 9.4% higher than September quarter 2015 (Building Approvals, Australia (cat. no. 8731.0)).
NEW BUILDING INVESTMENT EXPERIENCES STEEP QUARTERLY FALL
New building investment exhibited its strongest quarterly fall since September 2009 this quarter (falling 11.5%). The finalisation of construction projects as well as less construction work coming online drove this decrease.
MINING INVESTMENT CONTINUES TO FALL
In current price seasonally adjusted terms Mining investment fell for the twelfth consecutive quarter (down 10.6%) while Non-mining investment rose by 4.8%. This continues the trend seen since the March quarter 2014 with Non-mining investment's contribution to total GDP outweighing the contribution from mining investment.
At its peak in December quarter 2012, Mining investment contributed 9.4% to total GDP. This has now fallen to 3.4%, while Non-mining investment’s contribution has risen from 7.5% in December quarter 2012 to 9.0% this quarter. The fall in Mining investment is closely aligned to the decline in New engineering construction.
CONSTRUCTION OUTPUT DECLINES
Construction industry value added fell 3.6% during the September quarter 2016. This decline was driven by weakness in all three subdivisions (Building construction, Heavy and civil engineering construction and Construction services) with poor weather conditions and high rainfall contributing to delays in project work. The 3.8% through the year decline in construction output can be attributed to the transition from Mining investment to Mining production in the Australian economy.
REAL NET NATIONAL DISPOSABLE INCOME GROWS 0.8%
Real net national disposable income rose 0.8% in the September quarter 2016, up from a 0.5% rise in June quarter 2016. This continued growth is largely due to a 4.5% increase in Terms of trade. The Terms of trade experienced its first consecutive quarterly increase since September quarter 2011.
COMPENSATION OF EMPLOYEES RISES 1.3%
In current price seasonally adjusted terms, Compensation of employees rose by 1.3% this quarter, driven by the private sector. Total hours worked this quarter were up 0.5% (Labour Force, Australia (cat. no. 6202.0)) on the June quarter estimate while the total number of employees, including defence increased 0.4%. Average compensation per employee increased by 0.8% indicating that the increase in Compensation of employees was driven by additional hiring of employees and increased hours worked rather than wage increases.
REDUCTION IN GROSS MIXED INCOME MODERATES THE HOUSEHOLD SAVING RATIO
The Household saving ratio was 6.3% in seasonally adjusted terms in September quarter 2016, down from the 6.7% figure recorded last quarter. This decline was driven by a reduction in small business profits (Gross mixed income down 5.8%). The result occurred despite growth in wages and below trend growth in Household consumption.
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