SYDNEY: Australia’s economy is on track for healthy growth this year, new figures showed Wednesday, with a bounce in exports helping accelerate its shift from an unprecedented resources boom.
The upbeat news follows tepid growth in recent months, as Australia’s resource-driven economy has been hurt by softening Chinese demand for its commodities.
Growth in the September quarter was slightly above analyst expectations at 0.9 percent for an annual rate of 2.5 percent, the Australian Bureau of Statistics said.
This was was well above the sluggish 0.3 percent recorded the previous quarter, and Treasurer Scott Morrison hailed it as progress away from the mining boom to broader-based growth.
“There are positive signs of a strengthening economy and signs that our economy is heading in the right direction,” he said.
“The transition is underway in our economy. The next phase of Australia’s growth transition will be for businesses in the non-resources sector of the economy to increase their investment.”
The data showed the largest contribution to economic growth in the three months was from exports of goods and services, concentrated in mining commodities — the strongest growth in 15 years.
But Morrison said household consumption was also up as was housing construction and all these factors had more than offset a fall in business investment.
Jobs growth was strong and unemployment — now at 5.9 percent — falling, he added, while moving forward Australian businesses would benefit from recent free trade deals with China, Japan and South Korea.
Analysts had expected a 0.8 percent rise for the quarter and 2.4 percent in the year to September and the share market initially spiked on the news before closing down slightly.
The Australian dollar, which has dropped from around US 85 cents over the past year, was trading at about 73.07 US cents.
The latest numbers come after the Reserve Bank of Australia on Tuesday left interest rates on hold at the historic low of 2.0 percent for a seventh month in a row.
“Let’s not overplay the significance, but the economy is growing,” governor Glenn Stevens said Wednesday after the growth figures were released.
“The outlook for continued moderate growth — you would still say that’s the outlook based on this incremental bit of additional information.”
Commonwealth Bank chief economist Michael Blythe said the data deserved its positive spin but noted weakness in income was a concern.
While it was a long way from a recession fears, “GDP growth, whatever way you cut it, remains below-trend and is likely to remain there” as long as the mining investment boom unwinds, he said.
The ANZ bank agreed that while overall growth was soft, momentum looked to be turning.
“Today’s numbers suggest that the non-mining recovery is slowly taking hold,” it said in a note.
Shane Oliver, chief economist at AMP Capital, said the rebound in the September quarter indicated the economy was rebalancing and finding ways to offset the slump in mining investment and collapsing export prices.
He said the historically low interest rates and the depreciation in the Australian dollar had allowed those areas of the economy suppressed by the mining boom “to spring back to life”.
But he said the September rebound was unlikely to be repeated, and a further cut in interest rates could be needed to boost growth further in the future.
Paul Dales, chief economist for Australia and New Zealand at Capital Economics, said significantly accelerated growth in 2016 was doubtful.
The 0.9 percent figure “overplays the real strength of the economy as growth was driven by a very strong performance from net exports that is unlikely to be sustained,” he said.
“What happens next depends on whether net exports can continue to more than offset the falls in mining investment that lie ahead,” he added.