Economic activity increased 1.8 per cent in March quarter

Australia’s GDP rose by 1.8 per cent in seasonally adjusted terms in the March quarter, according to the ABS.

The announcement:

Australian Gross Domestic Product (GDP) rose 1.8 per cent in seasonally adjusted chain volume terms in the March quarter 2021, according to figures released by the Australian Bureau of Statistics (ABS) today.

Head of National Accounts at the ABS, Michael Smedes said: “With 1.8 per cent growth in the March quarter 2021, Australian economic activity has recovered to be above pre-pandemic levels and has grown 1.1 per cent through the year.” 

Private investment rose 5.3 per cent and contributed 0.9 percentage points to growth. Machinery and equipment investment recorded its strongest quarterly rise since December 2009, driven by the continued improvement in business confidence and support from Government tax incentives.

Mr Smedes added: “The rise in machinery and equipment investment was widespread and observed in both mining and non-mining industries.” 

Dwelling investment increased for the third consecutive quarter, rising 6.4 per cent. The rise was consistent with the recent surge in building approvals as households took advantage of the HomeBuilder scheme.

Gross Value Added (GVA) of the Construction industry rose 4.4 per cent and recorded the strongest contribution to growth across all industries. 

Household spending increased 1.2 per cent and added 0.7 percentage points to growth. Spending on services rose 2.4 per cent as COVID-19 restrictions continued to ease around Australia. Spending on goods declined 0.5 per cent but remained above pre-pandemic levels.

The household saving to income ratio fell slightly but remained elevated at 11.6 per cent, as the rise in household spending outpaced the growth in household income.

Compensation of employees rose 1.5 per cent as employment and hours worked increased with underlying activity in the economy.

A fall in benefit payments detracted from income growth, reflecting a decline in the number of recipients and the winding back of additional COVID-19 support payments during the quarter. 

Source: Australian Bureau of Statistics

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