11 things that happened in the Australian economy during the September quarter

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Released
6/12/2023
Source
Australian National Accounts: National Income, Expenditure and Product, September 2023

The Australian Economy - September quarter 2023

  1. Our economy grew a modest 0.2 per cent during the September quarter and 2.1 per cent in annual terms. This was the eighth straight quarter of economic growth, though the speed of growth has slowed. Growth this quarter was driven by government expenditure and capital investment. Ongoing high levels of migration to Australia saw GDP per capita fall 0.5 per cent, following a fall of 0.1 per cent in June.
  2. Inflation remains elevated. Consumer prices rose 1.2 per cent during the quarter and 5.4 per cent over the year. Hip pockets suffered at the petrol bowser as the global price for oil rose. Housing rents and electricity, among other necessities, saw large price rises. On a CPI basis, rents rose 7.6 per cent in the past twelve months, which was the largest annual increase since 2009.
  3. Wages began moving again. The wage price index rose 1.3 per cent during the quarter, which was the fastest quarterly rise on record. More jobs had wage movement and the average change in wage was significantly higher. The labour market stayed tight. The unemployment rate in the month of September was 3.6 per cent, and more than 14 million people were employed. The number of people in jobs grew by 0.5 per cent compared to the month of June.
  4. We spent a little bit less time working. We worked 0.7 per cent less hours than we did last quarter, though the amount of time we spent at work was still high by historical standards. This was the first quarterly fall in hours worked since measures were introduced to prevent the spread of COVID-19 in September quarter 2021. It meant labour productivity rose 0.9 per cent during the September quarter, though productivity was still down 2.1 per cent through the year.
  5. Household savings were low. Households only saved 1.1 per cent of their income this quarter, which is the lowest proportion of saving since December quarter 2007. Even though compensation of employees rose 2.5 per cent during the quarter, income taxes paid by households rose 7.6 per cent as tax offsets to low and middle income earners ended. Interest paid on mortgages also rose 7.6 per cent, despite no cash rate hikes during the quarter, as some borrowers came off fixed-rate loans.
  6. Builders worked through housing backlogs. New dwelling construction was up 0.2 per cent as supply chain pressures began to ease. This was driven by a 1.0 per cent rise in alterations and additions following seven straight quarterly falls. Approvals for new dwellings kept trending downwards, and the value of new loan commitments for housing were 4.7 per cent lower than a year ago.
  7. Households continued to tighten their belts. Fresh food purchases from supermarkets and grocers fell 0.2 per cent, while purchases of alcoholic drinks from bottle shops fell for the fifth quarter in a row. Taxes on gambling fell 6.9 per cent after a similar fall in the June quarter.
  8. Government support for power prices and childcare softened the blow. The Energy Bill Relief Fund and expanded eligibility to the childcare subsidy scheme commenced in July , contributing to a 1.1 per cent increase in government consumption. While electricity prices (on a CPI basis) still rose 4.2 per cent during the quarter, they would’ve risen by 18.6 per cent if not for the government rebates.
  9. GOOOAAAALLLL!!!! The Matildas won our hearts. We co-hosted the FIFA Women's World Cup, and our transport, accommodation, and arts and recreation industries felt the benefit. Travel exports grew 4.4 per cent during the quarter, driven by international travel for the World Cup plus an increase in education-related travel exports. The number of international students enrolled in Australia was at an all-time high: there were 4.0 per cent more international students than before the pandemic.
  10. Life is a highway. Despite the squeeze on household budgets and the high price of petrol, the post-pandemic travel bug continued to bite us. 13.0 per cent more cars were delivered to households this quarter, and we spent 3.9 per cent more on transport services such as flights.
  11. Mining pile-up. Mining exports fell, and as a result, $2.4 billion worth of inventories such as iron ore and coal were accumulated for sale in future quarters. Our farmers stepped up on the docks as exports of rural goods such as meat and wool rose 11.8 per cent.