Consumption in Australia
Australia - Consumption
Growth strengthens in Q2
Economic activity increased 0.9% on a seasonally-adjusted quarter-on-quarter basis in Q2, following the previous quarter's 0.7% expansion. The result was in line with market expectations.
Private consumption expanded 2.2% in Q2, matching Q1’s result, due to strong increases in household spending on travel and hotels and restaurants and a declining savings-to-income ratio. However, fixed investment increased at a softer pace of 0.2% in Q2 from the 0.7% expansion recorded in the previous quarter. Fixed investment was suppressed by falling investment in dwellings, itself hindered by adverse weather conditions and protracted material and labor shortages. Meanwhile, government consumption contracted 0.8% in Q2 (Q1: +2.6% s.a. qoq).
On the external front, exports of goods and services jumped 5.5% in the second quarter (Q1: -0.8% s.a. qoq), supported by rising foreign sales of mineral ores, mineral fuels, rural goods and travel and transportation services. Meanwhile, imports of goods and services expanded 0.7% in Q2 (Q1: +11.3% s.a. qoq). Overall, net trade contributed 1.0 percentage points to the quarter-on-quarter expansion.
Meanwhile, in annual terms, GDP growth accelerated to 3.6% in the second quarter, from 3.3% in the first quarter.
Commenting on the release, Lee Sue Ann, economist at UOB, stated:
“The latest GDP prints continue to paint an overall positive backdrop for the Australian economy, following a rough start to the year. Our view remains for economic growth to turn softer towards Q4 2022 as high inflation and rapid increases in interest rates weigh on households alongside a slowdown in global growth.”
Meanwhile, Robert Carnell, analyst at ING, commented:
“There is likely to be a boost next quarter from inventory accumulation, given the drawdown apparent this quarter, so we may be in for another similar headline figure of around 1.0% QoQ in 3Q22. If so, that would put full-year 2022 GDP growth on track to exceed 4% — not really conducive to getting inflation down rapidly and might indicate that rates will have to go higher and stay higher for longer to achieve the RBA's aim.”
Consensus Forecast panelists see the economy growing 3.8% in 2022, which is up 0.1 percentage points from last month’s forecast, and growing 2.9% in 2023.
Australia - Consumption Data
|Consumption (annual variation in %)||-||-||-||-||-|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
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December 2, 2022
Retail sales fell 0.2% in month-on-month seasonally-adjusted terms in October, contrasting September’s 0.6% increase. Looking at the details of the release, department store sales, household goods retailing, and clothing and footwear sales contracted, as did cafes, restaurants and takeaway food services sales.
November 17, 2022
Seasonally-adjusted employment increased by 32,200 in October, following 3,800 jobs shed in September.
November 9, 2022
The Westpac-Melbourne Institute consumer sentiment index decreased to 80.0 in November from 83.7 in October.
November 9, 2022
The business confidence index produced by National Australia Bank (NAB) dropped to 0.2 in October from 4.5 in September.
November 4, 2022
Retail sales expanded 0.6% in month-on-month seasonally-adjusted terms in September, matching August’s increase. Looking at the details of the release, food retailing and clothing and footwear sales expanded, as did cafes, restaurants and takeaway food services sales.