1387.3 - Queensland in Review, 2003
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/11/2003 Ceased
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The Queensland Economy: 1991-92 to 2001-02
2001-02 GROSS STATE PRODUCT Of the Australian States and Territories, Queensland in 2001-02, was the third largest economy as measured by gross state product (GSP), behind New South Wales and Victoria. GSP is the total value of goods and services produced in a state or territory, after deducting the cost of goods and services used up in the process of production. The Australian Bureau of Statistics uses chain volume measures to remove the direct effects of change in prices of goods and services in the economy. The resulting estimates are conventionally described as 'real'. The value of the Queensland economy, estimated by real GSP chain volume measures for 2001-02, was $115,530 million. The value of the New South Wales economy for the same period, measured by real GSP, was more than twice the size at $243,171 million. While GSP is an aggregate measure of the value of economic production in a state or territory, gross domestic product (GDP) is an aggregate measure of the value of production in a nation. In 2001-02 Queensland's real GSP contributed 16.6% towards Australia's GDP. New South Wales, Victoria and Queensland combined contributed 77.3% to GDP, giving these states considerable influence in the Australian economy. GSP PER PERSON GSP per person is calculated as the ratio of real GSP to the estimated resident population for the state. In 2001-02, Queensland's GSP per person (measured by GSP per head of mean population) was $31,479. This was $4,214 less than Australia's GDP per person and the third lowest rate of all Australian states and territories. REAL GSP(a), GSP PROPORTION OF GDP(b) AND GSP PER PERSON(c), 2001-02
ECONOMIC GROWTH The growth rate of the Queensland economy can be measured by the rate at which GSP is increasing. Generally, growth rates are used to monitor economic development over periods of time. Economic growth in Queensland, measured by growth in real GSP, rose 5.4% in 2001-02, while economic growth for Australia, as measured by real GDP, rose 3.9%. Western Australia was the only state or territory to experience higher growth for 2001-02, at 5.7%. While the New South Wales economy was more than twice as large as Queensland's in 2001-02, GSP growth was less than half, at 2.4%. GROWTH IN REAL GSP(a), 2001-02 (a) Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Further details can be found in end note 1. (b) GDP measure for Australia.
1991-92 to 2001-02 GROSS STATE PRODUCT Queensland's real GSP in 1991-92 was $68,895 million. By 2001-02, real GSP had increased by 67.7% to $115,530 million, the largest percentage increase of all Australian states and territories. Queensland's GSP as a proportion of Australia's GDP between 1991-92 and 2001-02 has increased from 15.0% to 16.6%, an increase of 10.4%. Queensland, Victoria and Western Australia were the only states or territories to increase their percentage contribution to Australia's GDP between 1991-92 and 2001-02. GROWTH IN CONTRIBUTION TO AUSTRALIA'S GDP, 1991-92 TO 2001-02 (a) Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Further details can be found in end note 1. Source: Australian National Accounts: State Accounts (cat. no. 5220.0). REAL GSP PER PERSON Population is a major factor determining the size of the economy. Comparing states based on their gross state product per head of population removes the effect of this factor. Real GSP per person, measured by GSP per head of mean population for Queensland, was $31,479 in 2001-02, compared with $23,777 in 1991-92, an increase of 32.4%. While Queensland's strong growth in real GSP, between 1991-92 and 2001-02, indicates strong economic growth, the real GSP per person for Queensland is low in comparison to the other states. This may be due to the high population growth in Queensland. Between 1991-92 and 2001-02, the rate of population growth in Queensland surpassed the rate of growth in every other state and territory. This had the effect of suppressing the ratio between real GSP and the estimated resident population in Queensland, as well as contributing to continual growth in GSP. REAL GSP(a) PER PERSON (a) Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Further details can be found in end note 1. Source: Australian National Accounts: State Accounts (cat. no. 5220.0). ECONOMIC GROWTH Average economic growth Between 1991-92 and 2001-02, Queensland's GSP growth in real terms has on average outperformed all states and territories. Queensland's GSP between 1991-92 and 2001-02, grew 5.0% on average each year, while growth in Australia's GDP rose on average 3.9% each year. Average annual growth for all Australian states and territories between 1991-92 to 2001-02 was effected by the economic downturn in the early 1990's. AVERAGE ANNUAL GROWTH IN REAL GSP(a), 1991-92 TO 2001-02
Over the decade Queensland's real GSP in 1992-93 recovered strongly, recording a 7.2% increase in growth. Australia's GDP grew 3.7% in 1992-93. In 1993-94, Queensland's GSP and Australia's GDP, in real terms, both increased by 3.9%. In each period between 1994-95 and 1997-98, the difference between Queensland's GSP and Australia's GDP was no more than 1.2 percentage points. In 2000-01, Queensland's real GSP growth was 2.0%, which was 3.0 percentage points below Queensland's annual average growth for real GSP in the period between 1991-92 and 2001-02. Domestic conditions such as high interest rates between November 1999 and August 2000 and the rise in oil prices as well as the effects of the introduction of the goods and services tax restrained growth in private investment expenditure (as measured by private gross fixed capital formation) and household consumption expenditure in 2001-02. These combined with slow international economic growth were likely reasons for the decline in Queensland's GSP growth over 2000-01. From 1998-99 to 2001-02, with the exception of 2000-01, economic growth in each period has been more than 1.4 percentage points stronger in Queensland than in Australia. Reasons for stronger growth in Queensland compared to Australia may have included population growth, particularly from net migration (both international and inter-state), labour productivity, lower taxation levels, household final consumption expenditure, and private investment expenditure. GROWTH IN REAL GSP(a) QUEENSLAND COMPARED WITH AUSTRALIA'S GROWTH IN REAL GDP (a) Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Further details can be found in end note 1. Source: Australian National Accounts: State Accounts (cat. no. 5220.0). Household consumption and private investment Household final consumption expenditure includes expenditure on cars, furniture, clothing, food and services and contributed 62.4% of Queensland's GSP in 2001-02. Private gross fixed capital formation expenditure (or private investment) includes dwellings, other buildings and structures and machinery and equipment and contributes 20.8% of Queensland's GSP. Consequently, changes in household consumption and private investment have considerable impact on movements in Queensland's GSP. Since 1992, household final consumption expenditure and private investment expenditure have contributed strongly to Queensland's real GSP growth. Between 1991-92 and 2001-02, Queensland's average annual growth in household final consumption expenditure, outperformed all states and territories, except Northern Territory. Between 1992-93 and 2001-02, average annual household final consumption expenditure growth was 4.2%, compared with 3.6% for Australia. Between 1991-92 and 2001-02, Queensland's average private investment annual growth (as measured by fixed capital formation expenditure) was 7.4%, compared with 7.0% for Australia. QUEENSLAND'S PURCHASING POWER Real GSP does not account for changes in the purchasing power of income generated by states or territories. The purchasing power between two economies will be equal when a unit of currency can buy the same basket of goods in both economies. For example, if the price of imports into Queensland increases relative to the price of exports (i.e. a change in the terms of trade), then the purchasing power of the income generated by Queensland will reduce. That is, the Queensland economy will not be able to afford the same basket of goods with the same unit of currency. A better measure of the real purchasing power of income generated by domestic production is chain volume GSP adjusted for changes in the terms of trade, which is referred to as real gross state domestic income (RGSDI). Generally, between 1991-92 and 2001-02, the pattern of RGSDI growth for Queensland follows the pattern of growth in Queensland's GSP. However there are some notable differences between 1998-99 and 2001-02. For 1998-99 and 1999-2000, Queensland's RGSDI growth was less than Queensland's real GSP growth. In 1998-99, RGSDI growth was 5.6%, compared with growth in GSP of 6.7%. In 1999-2000, RGSDI growth was 5.4%, compared with growth in real GSP growth of 6.4%. This had the effect of suppressing the benefits of economic growth such as higher incomes and standard of living. On the other hand, for 2000-01 and 2001-02, Queensland's RGSDI growth was greater than real GSP growth. In 2000-01, RGSDI growth was 3.1%, compared with growth in GSP of 2.0%. For 2001-02 RGSDI growth was 7.3%, compared with growth in real GSP growth of 5.4%. This had the effect of enhancing the benefits of economic growth, for example improving the ability of the Queensland population to purchase goods and services. REAL GROSS STATE DOMESTIC INCOME AND REAL GROSS STATE PRODUCT(a), QUEENSLAND (a) Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Further details can be found in end note 1. Source: Australian National Accounts: State Accounts (cat. no. 5220.0). THE QUEENSLAND ECONOMY 2002-03 On 12 November 2003, the ABS will release Australian National Accounts: State Accounts (cat. no. 5220.0). This will include annual data on all Australian states and territories for the year ended June 2003. END NOTES 1. Based on GSP, chain volume estimates, experimental series. Reference year for chain volume measures is 2000-01. Users are cautioned that these estimates are derived indirectly by calculating a deflator from the expenditure components of the state series concerned. Therefore, in general, the sum of the state estimates does not equal the estimates for Australia. It is emphasised that, at times, there may be movements that cannot be fully explained in the chain volume estimates of GSP through the use of this proxy deflator 2. The estimates contained in this the 2002-03 National Accounts: State Accounts (cat. no. 5220.0) issue are based on annual supply and use benchmarks for Australia as published in the 2002-03 issue of Australian System of National Accounts (cat. no. 5204.0). They incorporate new and revised estimates from the annual supply and use tables for 1999-00, 2000-01 and 2001-02, and from other sources which normally become available by this time each year. The revised annual supply and use tables contain revisions to the contributions of each industry. The most significant revision is to Agricultural value added following a review of compilation methods. All states are affected by this revision. Although the supply and use table revisions have not had a significant impact on the aggregate GDP movements for Australia, because the structure of economic activity varies across states there are revisions to GSP for each state in response to the industry changes at the Australia levels. LINKS NATIONAL ACCOUNTS DEFINITIONS AND REFERENCE MATERIAL Summary of National Accounts (cat. no. 5204.0) National Accounts Glossary Australian National Accounts: Concepts, Sources and Methods (cat. no. 5216.0) RELATED PUBLICATIONS AND PRODUCTS Key Statistics Queensland Australian National Accounts, State Accounts (cat. no. 5220.0) Annual Publication. Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) Quarterly Publication. Time Series spreadsheet: Australian National Accounts, State Accounts (cat. no. 5220.0) NON- ABS SOURCES OF INFORMATION Office of Economic and Statistical Research Queensland Government, Treasury
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