A response to the Australian GDP data yesterday from Tim Colebatch, who Australians will know from his work at The Age as a former economics editor
He has a much more sanguine view on the OZ economy than what has been the case since the GDP data yesterday (links to all the doom and gloom is available from here)
Says Colebatch:
Domestic demand ... grew by just 1.2 per cent last year, on top of growth of just 0.9 per cent the year before, and 0.8 per cent the year before that .. those figures look sick.
- But suppose we divide domestic demand into two parts: engineering construction and everything else. Engineering construction is the story of the mining boom ... boom has bust, as the wiser economists always said it would.
- But how about everything else we spend money on? Our spending on Everything Else grew just 1 per cent in 2012-13, but accelerated to 1.8 per cent in 2013-14, and then to 2.6 per cent in 2014-15. In the first six months of 2015, it was growing at an annualised rate of 3.4 per cent. Is that evidence of a weak economy? Don't think so!
What is pushing it along?
- Consumer spending makes up a bit over half of it, and it's kept growing at a decent clip
- Apartment building boom
- A surprise source of growth: the Abbott government... has increased its own-purpose spending by 4.7 per cent over the past year
- But the big source of growth in Australia today is exports, which grew by 5.3 per cent in volume over the past twelve months
Much, much more detail at the story, which is not gated: Australia: much better than it looks!