ANALYSIS OF RESULTS


GROWTH IN GSP VOLUME MEASURES

The volume measure of Gross State Product (GSP), which is the headline measure of state economic activity, increased in all states except Western Australia in 2016-17. The Australian Capital Territory (4.6%), the Northern Territory (4.0%), Victoria (3.3%), New South Wales (2.9%) and South Australia (2.2%) all exceeded Australia’s national Gross Domestic Product (GDP) growth rate of 2.0%.

Western Australia’s GSP declined 2.7%. Despite being the only state to record declining growth in 2016-17, Western Australia has averaged annual growth of 3.9% over the past ten years, the strongest of all the jurisdictions. This growth over the past decade is attributed to large mining investment, which has significantly fallen this year.


GSP PER CAPITA

Population growth rates across states explain some differences in GSP growth, it is therefore useful to analyse movements in GSP per capita. This publication includes updated estimates of population based on the 2016 Census of Population and Housing. In 2016-17 the Australian Capital Territory and the Northern Territory showed the highest growth in GSP per capita. A fall in Western Australia demonstrate that population growth was higher than growth in GSP in this state.




REAL GROSS STATE INCOME

While GSP measures domestic production, the real purchasing power of income generated by that production is affected by changes in the prices of international and interstate imports and exports. Real gross state income (RGSI) adjusts GSP for these changes in a state's Terms of trade (for details on the calculation method see the Explanatory Notes, paragraphs 26 - 28).

All states and territories recorded higher RGSI, reflecting the increasing Terms of trade at the national level in 2016-17. The highest increases were shown in Queensland (7.5%) and Northern Territory (6.4%) in line with the higher volumes produced and prices received for mining commodities.

INDUSTRY GVA CONTRIBUTION TO GROSS STATE PRODUCT GROWTH
		NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Aust.(a)
		% pts	% pts	% pts	% pts	% pts	% pts	% pts	% pts	% pts
2016-17
	Agriculture, forestry and fishing	0.2	0.4	0.3	1.4	0.5	0.5	0.2	0.0	0.4
	Mining	0.0	0.0	0.1	-0.3	0.5	-0.4	0.4	0.0	0.1
	Manufacturing	0.1	-0.2	-0.2	0.0	-0.3	-0.1	0.2	-0.1	-0.1
	Electricity, gas, water and waste services	0.0	0.1	0.0	0.1	-0.1	0.1	0.0	0.1	0.0
	Construction	0.2	0.4	-0.2	-0.5	-2.8	-0.3	0.8	0.4	-0.3
	Wholesale trade	0.3	0.3	0.2	0.3	0.1	0.3	0.1	0.0	0.3
	Retail trade	0.1	0.1	0.1	0.1	0.0	0.1	0.0	0.1	0.1
	Accommodation and food services	0.1	0.1	0.0	0.0	-0.1	0.1	0.1	0.0	0.0
	Transport, postal and warehousing	0.0	0.2	0.2	0.1	0.0	-0.2	-0.1	0.1	0.1
	Information media and telecommunications	0.2	0.0	0.0	0.1	0.0	0.0	0.0	0.4	0.1
	Financial and insurance services	0.5	0.2	0.3	0.1	0.4	-0.8	0.2	0.1	0.3
	Rental, hiring and real estate services	0.1	0.1	0.1	0.1	0.0	0.0	0.0	0.1	0.1
	Professional, scientific and technical services	0.7	0.7	0.3	-0.1	-0.7	0.0	1.1	2.7	0.4
	Administrative and support services	-0.1	0.1	0.1	0.0	-0.1	0.0	0.4	0.1	0.0
	Public administration and safety	0.1	0.3	0.1	0.1	-0.3	0.8	0.2	0.0	0.1
	Education and training	0.1	0.1	0.0	0.0	0.0	0.0	0.0	0.0	0.1
	Health care and social assistance	0.3	0.3	0.5	0.5	0.3	0.7	0.2	0.7	0.4
	Arts and recreation services	0.0	0.0	0.0	0.0	0.0	-0.1	0.1	0.0	0.0
	Other services	0.0	0.0	0.0	0.0	-0.1	0.0	0.0	0.0	0.0
	Ownership of dwellings	0.2	0.2	0.2	0.2	0.1	0.4	0.6	0.2	0.2
	Taxes less subsidies on products	0.1	0.1	0.1	0.1	0.0	0.0	0.1	0.0	0.1
	Statistical discrepancy	-0.3	0.1	-0.3	0.0	-0.1	0.0	-0.3	-0.4	-0.2
	Gross state product	2.9	3.3	1.8	2.2	-2.7	1.1	4.0	4.6	2.0
- nil or rounded to zero (including null cells)
(a) Gross domestic product.

A record wheat harvest along with desirable growing conditions resulted in Agriculture, Forestry and Fishing contributing 0.4 ppt to Australian economic growth in the 2016-17 year. This strength in wheat and other agriculture was strongly observed in Western Australia, South Australia and Victoria which all recorded growth above 15% for the industry.

Services to business have been a continual growth area for the Australia economy resulting in Professional, Scientific and Technical Services contributing 0.4pp to economic growth in 2016-17. As expected this was most evident in New South Wales and Victoria, states with a high proportion of corporate activity. The Australian Capital Territory and the Northern Territory also recorded strong growth in this industry, reflecting a pick-up in business consulting.

Health Care and Social Assistance also contributed 0.4 ppt to growth in 2016-17. This industry contributed strongly to the growth observed in Queensland, South Australia and Tasmania.


STATE FINAL DEMAND (SFD)

State Final Demand is a measure of domestic demand in the economy. State final demand increased in all states except Western Australia.

STATE FINAL DEMAND, Chain volume measures
			2016-17
	2015-16	2016-17	SFD Growth	Contribution to DFD
			%	% pts
New South Wales	537,852	556,233	3.4	1.1
Victoria	409,772	425,579	3.9	0.9
Queensland	323,091	330,867	2.4	0.5
South Australia	106,026	108,992	2.8	0.2
Western Australia	215,866	200,256	-7.2	-0.9
Tasmania	30,924	31,185	0.8	0.0
Northern Territory	27,768	30,046	8.2	0.1
Australian Capital Territory	44,799	46,141	3.0	0.1
Australia	1,696,097	1,729,297	2.0	2.0
- nil or rounded to zero (including null cells)
(a) Domestic final demand.

HOUSEHOLD FINAL CONSUMPTION EXPENDITURE (HFCE)

In current prices, SFD growth was driven by an increase in HFCE for all states except Western Australia. Victoria, South Australia, New South Wales and the Australian Capital Territory, all grew by more than the national total (3.0%). This spending by the household sector is broadly in line with annual estimates of Compensation of Employees (COE), the major source of income for the household sector. The strength in COE is supported by the increases reported in employment and actual hours worked during the 2016-17 year. As shown below, low or negative growth in COE is reflected with weak or declining HFCE for Tasmania (1.0%) and Western Australia(-0.2%).




PUBLIC GROSS FIXED CAPITAL FORMATION

State and Local General Government GFCF increased in all states except Queensland which fell only by 0.2%. Of the states that grew, South Australia had the largest increase due to the purchase of the Royal Adelaide Hospital, while Victoria (28.3%) and the Australian Capital Territory (21.6%) grew strongly on the back of higher infrastructure spending.




PRIVATE GROSS FIXED CAPITAL FORMATION

Private GFCF grew in five of the eight states, predominately on the strength of dwelling construction. Growth in high density dwellings contributed to the Australian Capital Territory, recording the strongest result, followed by New South Wales and Victoria. Dwelling construction fell in the Northern Territory but overall private GFCF still grew. This was due to strength in business investment as expenditure in the mining industry continued at high levels.