- Our economy grew 0.2 per cent during the December quarter 2023 and 1.5 per cent in annual terms. While we experienced a ninth successive quarter of growth, this was the slowest annual growth rate since the COVID-19 pandemic. Strong population growth saw GDP per capita fall 1.0 per cent over the year.
- Inflation continued to impact most goods and services. The consumer price index rose 0.6 per cent in the December quarter and was up 4.1 per cent in the past 12 months. This was the smallest quarterly rise since March quarter 2021. Insurance got more expensive, as higher insurance premiums sent prices up 3.8 per cent. Increased tobacco taxes saw the price of cigarettes up 7.0 per cent.
- Wage reviews pushed wage growth higher. The wage price index rose 0.9 per cent during the quarter and 4.2 per cent over the year. This was the highest recorded annual growth since the March quarter 2009. Public sector wages grew 1.3 per cent on the back of new workplace agreements, including those for teachers and nurses.
- The labour market started to slow. Job vacancies fell slightly by 0.7 per cent during the quarter but remained high. The unemployment rate inched up reaching 3.9 per cent in the month of December, as participation rates stayed close to record highs.
- Labour productivity rose again. We worked similar hours to last quarter, with the amount of time we spent at work remaining historically high. Overall labour productivity rose 0.5 per cent during the quarter, which was the second successive quarterly rise following a period of falling labour productivity.
- Households saved slightly more. Households saved 3.2 per cent of their income this quarter, as compensation of employees rose 1.4 per cent and government social assistance benefits grew 5.9 per cent. Interest paid on mortgages rose by 5.0 per cent, as some borrowers continued to come off lower fixed-rate loans.
- We ate at home more. Household consumption rose a meagre 0.1 per cent, following a fall of 0.2 per cent last quarter. Spending on food rose 0.9 per cent, while spending on catering services, pubs and clubs dropped off. Total discretionary spending by households fell 1.6 per cent over the year.
- Inventories reduced as imports fell. Imports of consumption goods like food, clothing, electrical items and cars fell 5.4 per cent during the quarter. As imports of these goods dropped, many businesses depleted their existing inventories to meet consumer demand.
- Travellers had wanderlust for cheaper holidays. As many Australians headed home from their European summer adventures, spending on overseas travel fell 9.0 per cent during the quarter. This reflected a shift towards destinations closer to home, led by New Zealand and Indonesia. On the other hand, spending by visitors to Australia rose 1.2 per cent and is now above pre-pandemic levels.
- Businesses continued to invest. Business investment rose a modest 0.7 per cent during the quarter, which was the fourteenth successive quarterly rise. Spending on new warehouses and data centres drove a 5.0 per cent rise in non-dwelling building construction.
- Government spending outpaced household spending. Commonwealth government expenditure (excluding Defence) added 0.2 percentage points to economic growth in the December quarter. Growth was driven by more spending on government benefits for households and employee expenses, including increased Medicare expenditure, pharmaceutical benefits and expenditure linked to the Voice to Parliament referendum.
11 things that happened in the Australian economy during the December quarter
Released
6/03/2024