EXPENDITURE ON GDP

Final consumption expenditure increased 3.6% in 2007-08, and contributed 2.7 percentage points to GDP growth.

Household final consumption expenditure increased 3.7% and contributed 2.1 percentage points to GDP growth in 2007-08. In recent years household consumption has contributed between 1.9 percentage points and 3.6 percentage points to GDP growth. The key contributors to growth in 2007-08 were expenditure on Recreation and culture (up 6.4%), Transport (up 3.4%), Rent and other dwelling services (up 2.2%) and Furnishings and household items (up 6.4%). See Table 53 for more details.

Government final consumption expenditure increased 3.4% in 2007-08. It contributed 0.6 percentage points to growth in GDP, up from 0.5 percentage points in 2006-07.

Growth in Private business investment, after slowing to 6.7% in 2006-07, accelerated to 15.1% in 2007-08, similar to growth in the four years prior to 2006-07. Private business investment contributed 2.3 percentage points to GDP growth, up from 1.0 percentage points in 2006-07. Investment in Machinery and equipment, and Non-dwelling construction increased 18.4% and 10.8%, respectively, and contributed 1.3 and 0.7 percentage points to growth in GDP, respectively.

Investment in Alterations and additions was up 2.4% in 2007-08, while New and used dwellings grew 0.2%, the first appreciable increase for three years. Total dwelling investment increased 1.3% and contributed 0.1 percentage points to GDP growth.

Public gross fixed capital formation increased 6.4% in 2007-08 after increasing by more than 8.0% each year for the preceding three years. Investment by public corporations rose 6.3% and investment by general government increased by 6.4%. Public investment contributed 0.3 percentage points to GDP growth in 2007-08, down from 0.4 percentage points in 2006-07 and 2005-06.

Growth in the domestic economy as measured by Gross National Expenditure (GNE) (footnote 2) showed an increase of 5.4%. Over the past six years GNE has been growing at a faster rate than GDP. This reflects net exports (the difference between exports and imports of goods and services) detracting from growth in GDP. For more information on net exports please refer to the section on International Trade.

Footnote:
2 The total expenditure within a given period by Australian residents on final goods and services. <back