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The Australian economy has rebounded above pre-pandemic levels, after it recorded 1.8 per cent growth in the March quarter, following government stimulus spending and surging business confidence.
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Economic activity jumps 1.8% in March quarter
03 June 2021
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The Australian Bureau of Statistics (ABS) on Wednesday released new national accounts data that shows the Australian economy has returned to a state unseen since 2019, after gross domestic product (GDP) rose by 1.8 per cent over the March quarter.
Head of national accounts at the ABS Michael Smedes said the new data shows the Australian economy has recovered to a state unseen since before the pandemic.
“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,” he said.
A 5.3 per cent jump across private investment pushed GDP 0.9 of a percentage point through the quarter, while machinery and equipment investment saw its strongest quarterly rise since December 2009, driven by improved business confidence and government tax incentives.
“The rise in machinery and equipment investment was widespread and observed in both mining and non-mining industries,” Mr Smedes said.
Housing investment recorded a 6.4 per cent rise, increasing for the third consecutive quarter, following recent approvals and strong uptake of the government’s HomeBuilder scheme.
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The construction industry was the largest contributor to growth across all industries, as it rose by 4.4 per cent, while household spending increased by 1.2 per cent, contributing 0.7 of a percentage point to the nation’s GDP.
Spending on services saw a lift of 2.4 per cent as pandemic restrictions, for the most parts, began to wane, while spending on goods stumbled by 0.5 of a percentage point but remained above pre-pandemic levels.
Australians have continued to save throughout the pandemic, even as the household saving-to-income ratio dipped, but remained elevated, at 11.6 per cent, as the spending outpaced growth in household income.
Meanwhile, compensation of employees jumped by 1.5 per cent, as the unemployment rate through the quarter continued to fall, and hours worked increased with underlying activity in the economy.
Dwindling benefit payments took away from income growth as JobKeeper expired at the end of March.
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