Dwelling investment fall a ‘weak outcome’: Treasurer

National accounts data for the June quarter 2022, released by the Australian Bureau of Statistics (ABS), have shown a slight economic rebound.

Overall, real GDP increased by 0.9 per cent for the June quarter and was 3.6 per cent higher over the year to June, the ABS report confirmed.

However, wet weather across much of the east coast — and continued material and labour shortages — hampered construction activity. This detracted 0.1 percentage points from GDP.

Moreover, dwelling investment fell by 2.9 per cent in the June quarter to be 4.6 per cent lower over the year, according to the latest federal government data.

Federal Treasurer Dr Jim Chalmers MP described the drop as: “...a surprisingly weak outcome given the large pipeline of work in the sector.”

The Treasurer added that the latest insights into the housing market reflected ongoing labour and supply chain pressures, with some businesses in the sector under considerable financial strain from high inflation in input costs.

Disposable income falls yet again

There was further evidence in the national accounts of the significant cost-of-living pressures impacting many Australian households, the Treasurer explained.

“While there are signs that wages are starting to pick up, the national accounts measure of average earnings increased by less than the Consumer Price Index over the year to June, indicating falling real wages,” he stated.

“Real household disposable income fell for the third consecutive quarter, by 0.5 per cent in the June quarter.

“While our economy is being buffeted by global pressures and domestic constraints right now, Australians can be confident that better times lie ahead.”

While the headline figures were encouraging, the details confirmed the pressures that are being felt by Australian households and that are weighing on our supply chains, the Treasurer explained.

Delta outbreak impacts quarter

Commenting after the release of the report, the head of national accounts at the ABS, Sean Crick, stated: “Rises in household spending and exports drove growth in the June quarter. This is the third consecutive quarter of economic growth, following a contraction in the September quarter 2021, which was impacted by the Delta outbreak.”

Exports rose at strongest rate since September 2000

Net trade contributed 1.0 percentage points to GDP, driven by exports, which rose 5.5 per cent, which was partially offset by imports increasing 0.7 per cent.

“Exports recorded the strongest quarterly rise since the Sydney Olympics boosted travel exports in September quarter 2000,” Mr Crick said. 

Goods exports rose 4.2 per cent, with the main contributors being mineral ores, other mineral fuels and rural goods. 

Services exports rose 13.7 per cent, driven by travel and transportation services, as international borders were open for the full quarter.

Rise in commodity prices led to high mining profits

The terms of trade rose 4.6 per cent with export and import prices up strongly for a second quarter in a row. 

Ongoing supply chain issues and global uncertainty continued to drive demand for Australia’s mining and rural commodities. 

High commodity prices coupled with increased export volumes drove a 16.9 per cent increase in mining operating surplus in June to $83 billion.

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