On 1 June 2022 the Australian Bureau of Statistics (ABS) published the March quarter 2022 Australian National Accounts: National Income, Expenditure and Product (Cat. No. 5206), which means we can update the Practical Economics quarterly Australian State and Territory Gross State Product (GSP) series.
The ABS does not publish quarterly state and territory GSP.
The Practical Economics quarterly GSP method involves benchmarking quarterly industry indicators to annual industry GSP, creating quarterly industry value-added, and then aggregating the results. For a full description of the method see here.
At this stage our quarterly industry indicators are simply national quarterly industry value-added, which are adjusted by annual state and territory GSP.
We always encourage you to read our disclaimers here and here.
We are pressed for time at the moment, so we’ll just present the data without much comment. We will, however, make a brief comment on the difference between the ABS’ national Gross Domestic Product (GDP) March quarter 2022 growth and growth in the sum of Practical Economics’ state and territory GSP .
Quarterly seasonally-adjusted GSP contracted in all states and territories in the March quarter 2022 compared to the December quarter 2021.
March Quarter 2022 Practical Economics Gross State Product, Percentage Changes, Chain Volume Data
This continues the volatility evident since the start of the COVID-related lockdowns in the March quarter of 2020 and subsequent recovery, as shown in the series of chart below.
Quarterly State and Territory GSP Growth September 2002 to March 2022, Chain Volume, 2019-20 Prices, Seasonally Adjusted
The economies of all states and territories in the March quarter 2022 were substantially larger than a year earlier. Western Australia had the lowest annual GSP growth rate, but this is because it did not have as severe a downturn as other states and territories.
It is worth noting that Practical Economics’ sum-of-states-and-territories GSP contracted by 0.5% in the March quarter 2022, compared to ABS GDP growth of 0.8% (https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/mar-2022/5206006_Industry_GVA.xlsx).
Original (i.e. before seasonal adjustment) ABS GDP and Practical Economics’ sum-of-states-and-territories GSP both contracted by similar amounts in the March quarter 2022. Therefore the difference between the seasonally-adjusted estimates must be differences in the seasonal-adjustment techniques.
We don’t have time right now, but we will look into this as soon as we can.
In terms of output gaps, or the level of economic activity had GSP continued at its pre-2020 growth rate, only Victoria and the ACT remain below trend.
December Quarter 2021 Output Gap, Percentage Gap, Chain Volume Data (positive gap means output below trend)
The next update to our series will flow from the ABS National Income, Expenditure and Product release on 7 September 2022, which will include national industry and demand data for the June quarter 2022, and hence indicators for our series.
According to the ABS the annual benchmark series will be updated on 12 December 2022.
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