Gross State Product Australia, Quarterly GSP Australia, Quarterly State Accounts Australia. Economic growth. GSP growth. New South Wales (NSW), Victoria (Vic), Queensland (Qld), South Australia (SA), Western Australia (WA), Tasmania (Tas), Australian Capital Territory (ACT), Northern Territory (NT). Benchmarking. June quarter 2023, 2022/23. Australian Bureau of Statistics (ABS), Cat No. 5220.0, Cat No. 5206.0.
On 5 June 2024 the Australian Bureau of Statistics (ABS) published the September quarter 2023 Australian National Accounts: National Income, Expenditure and Product (Cat. No. 5206.0), which means we can update the Practical Economics quarterly Australian state and territory Gross State Product (GSP) data series.
The ABS publishes quarterly Gross Domestic Product (GDP) in Cat. No. 5206.0, and annual GSP in Australian National Accounts: State Accounts (Cat No. 5220.0), but does not publish quarterly state and territory GSP.
The Practical Economics quarterly GSP method involves benchmarking quarterly industry indicators to annual GSP data. For a full description of the method see here and in the draft Technical Paper that can be downloaded here.
Keen observers will note that we didn’t post on the December quarter 2023 ABS Cat. No. 5206.0 release. Our day job was a bit busy! Hence we’ve included the December quarter 2023 here. However, we are still short of time so this will be a brief post.
Table 1 below shows quarterly GSP growth for the December quarter 2023. The economies of many states and territories contracted during the December quarter 2023 and the year to the December quarter (December quarter 2023 relative to the December quarter 2022). The post-COVID lockdown recovery in Australia ground to a halt.
Table 1: Gross State Product Growth, December Quarter 2023, Chain Volume Data
| State | Quarterly Growth Sep-23 to Dec-23 | Year-on-year Growth Dec-22 to Dec-23 |
|---|---|---|
| NSW | 0.22 | 1.48 |
| VIC | -0.38 | 1.53 |
| QLD | -0.36 | 1.24 |
| SA | -0.28 | 1.37 |
| WA | -0.21 | 0.57 |
| TAS | -1.89 | 1.47 |
| NT | -3.83 | 1.13 |
| ACT | 0.17 | 2.35 |
| AUS | -0.22 | 1.29 |
Table 2 below shows quarterly GSP growth for the March quarter 2024. The economies of most states and territories grew during the March quarter 2023 and the year to the December quarter (March quarter 2024 relative to the March quarter 2023). However, annual growth was week in all jurisdictions save for the ACT.
Table 2: Gross State Product Growth, March Quarter 2024, Chain Volume Data
| State | Quarterly Growth Dec-23 to Mar-24 | Year-on-year Growth Mar-23 to Mar-24 |
|---|---|---|
| NSW | 0.45 | 1.29 |
| VIC | 0.31 | 1.26 |
| QLD | 0.06 | 1.13 |
| SA | 0.43 | 0.81 |
| WA | 0.48 | 0.93 |
| TAS | 1.25 | 0.68 |
| NT | -0.37 | 1.38 |
| ACT | 0.77 | 3.01 |
| AUS | 0.36 | 1.19 |
The reason for the slowdown can be seen in the expenditure side of the national accounts, as shown in Table 3 below. There are two notable aspects to the national expenditure picture. The first is a collapse in investment, with notable falls in in dwelling investment (dwelling construction and resale (ownership transfer costs)) , business investment construction and public investment.
Table 3: Gross National Product Growth, March Quarter 2024, Chain Volume Data, ABS: Australian National Accounts: National Income, Expenditure and Product, March Quarter 2024
Secondly, while private consumption grew moderately over the year, inventory growth contributed 0.7 percentage points to GDP growth in the March quarter 2024. Given GDP growth was only 0.1 % in the March quarter 2024, inventory growth was the only thing saving Australia from a contraction in GDP in the quarter.
GDP is a measure of production, and inventories are goods produced but not consumed. Consistent runs of unsold goods indicate a weakness in expenditure in the economy, which eventually flows through to production. This is why buildups in inventories frequently predate recessions.
However, we are not to this point yet – inventories subtracted 0.3 percentage points to GDP growth in the December quarter 2023 (i.e. they fell) – so we will see how things pan out.
The obvious candidate for weakness in consumption and investment is the interest rate rises, where the Reserve Bank of Australia’s cash rate target rose from 0.1% per annum in April 2022 to 4.35% per annum by December 2023.
However the supply side might be affecting investment in particular. Cost blowouts are common in the dwelling sector, and completed private new dwelling completions are substantially down over 2023. Additionally, reports of difficulty completing large public projects and cost blowouts are becoming more common.
The big interjurisdictional story post the COVID-lockdowns remains that, while Australia’s output has returned to roughly its pre-lockdown trend, smaller states (mainly South Australia and Western Australia) have soared above trend, while Victoria’s economy has remained below trend. Victoria’s economy seemed to be mounting a comeback when we reported the September quarter 2023 quarterly GSP results, but this faltered over the next two quarters.
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The next regular update to our series will come from the ABS National Income, Expenditure and Product release on 4 September 2024, which will include national industry data for the June quarter 2023.
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