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Australian Bureau Of Statistics

Economic Activity Increased 3.3% In September Quarter 2020

Victor P Taffa

Australian economic activity rose 3.3 % in seasonally adjusted chain volume terms in the September quarter 2020, according to figures released by the Australian Bureau of Statistics (ABS) today.

“Following the record 7.0 % decline in the June quarter, Australia experienced a partial recovery in the September quarter. As a result, economic activity fell 3.8 % through the year to September quarter.” ABS Head of National Accounts Michael Smedes said.

Reduced COVID-19 case numbers resulted in an easing of social distancing measures and trading restrictions across most states and territories during the September quarter. Victoria was the exception, with the state implementing stage 4 restrictions in early August due to a spike in COVID-19 cases. The ABS published a series of spotlight articles to highlight the impacts of COVID-19 on the economy this quarter.

Household spending drove the economy, rising 7.9 % due to increased spending on both goods and services. Spending on services rose 9.8 %, driven by spending on hotels, cafes and restaurants, health and recreation and culture as containment measures were relaxed.

Easing of restrictions also increased demand for goods, which rose 5.2 %. Victoria’s household spending fell 1.2 %, the only state to record a fall, as tighter restrictions were imposed.

“Despite record quarterly growth in household spending, the level in September quarter was 6.8 % lower than that recorded in December Quarter 2019.” Mr. Smedes said.

Compensation of employees rose 2.3 % as hours worked increased. Part-time employment also rose. The household saving to income ratio remained elevated at 18.9 %, a slight fall from 22.1 % in June quarter when household spending collapsed.

Net trade detracted 1.9 percentage points from GDP, the largest detraction since September quarter 1980. Imports of goods and services rose, predominantly reflecting increased demand for consumption goods as restrictions lifted.

Exports of goods of services fell, as a result of weaker demand for Australian mining commodities and constraints on travel.

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