12 things to know about the Australian economy right now

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Released
7/12/2022
Source
Australian National Accounts: National Income, Expenditure and Product, September 2022

The Australian Economy - September quarter 2022

  1. Our economy grew 0.6 per cent during the September quarter 2022, and 5.9 per cent compared to last year. This was the fourth consecutive quarter of growth since the COVID-19 Delta variant lockdowns. Household consumption drove the increase, growing 1.1 per cent.
  2. We spent more and saved less. The household saving rate continued to fall reaching pre-pandemic levels. Households saved 6.9 per cent of their income during the quarter, compared to 6.8 per cent in the December quarter 2019.
  3. Consumer prices rose 1.8 per cent during the September quarter 2022 and 7.3 per cent compared to last year. This was the fastest annual increase since 1990. The major drivers of consumer price increases during the quarter were in housing, gas and furniture.
  4. Wage growth continued to trail inflation but showed signs of strengthening in response to tight labour market conditions. The unemployment rate for the month of September was 3.5 per cent. Compensation of employees rose 3.2 per cent, which was the highest quarterly rise since December quarter 2006. The private sector wage price index rose 1.2 per cent in the September quarter 2022, the highest rate of growth since September quarter 2010. Compared to a year ago, private sector wages rose 3.4 per cent, the highest annual rate of growth since December quarter 2012.
  5. We continued re-engaging with the world. In the first full quarter of relaxed international travel restrictions, spending on overseas trips grew 58 per cent. International travel reached 56 per cent of pre-pandemic levels as holidays returned to our lives.
  6. Airlines soared. With pent-up demand, activity in the air transport industry rose 25.2 per cent. The construction industry was strong on the back of major engineering and infrastructure projects, and rose 2.3 per cent. Coal mining activity has fallen for four quarters in a row.
  7. Domestic mobility increased. Household purchases of transport services rose 13.9 per cent, reaching 70 per cent of pre-pandemic levels. We purchased more cars as supply bottlenecks began to ease and imports rose. Catering and accommodation services also grew by a strong 5.5 per cent with increased tourism and mobility.
  8. Our exports rode on the sheep’s back. While wet weather hampered exports of coal, rural exports surged 9.8 per cent, led by wool and cotton. Imports of communications equipment rose 5.7 per cent as new mobile phone models became available.
  9. Exports were supercharged by lithium. Our lithium concentrates exports reached a value of $3.4 billion this quarter and was up six-fold through the year. Lithium has surged into Australia’s top 10 export commodities.
  10. Private business investment rose 2.5 per cent led by an increase in infrastructure building. Home-building activity rose 3.4 per cent following an uptick in building approvals, a moderation of labour and material shortages, and an improvement in weather conditions. Government construction fell as quarantine facilities in Queensland and Western Australia were completed.
  11. Profits of financial corporations rose 4.9 per cent during the quarter. Rises in the cash rate during the quarter saw lenders tending to pass on rate increases on loans more quickly than on deposits. This was the fastest growth in financial profits since September quarter 2008.
  12. The current account returned to deficit for the first time since March quarter 2019 as corporate profits went overseas. Mining profits fell 7.1 per cent during the quarter due to weaker commodity prices.