Australia exports up most in 15 years
Country’s GDP advances 0.9% in the three months through September from the previous quarter
Australia’s economy expanded at a quicker pace than economists forecast in the third quarter, driven by the fastest gain in exports since 2000, and supporting the central bank’s decision Tuesday to keep interest rates steady.
Gross domestic product advanced 0.9 per cent in the three months through September from the previous quarter, when it rose a revised 0.3 per cent, government data showed yesterday. That compared with the median of 28 estimates for a 0.8 per cent gain. The picture inside Australia was a little less rosy than the headline, as domestic demand contracted by half a per cent in the three months.
The report spans a period when Australia’s currency dropped almost 9 per cent in response to record-low interest rates as the central bank sought to spur investment outside the resources industry. The GDP data was mainly a story of a recovery in export volumes that had been constricted by storms that shut ports in the second quarter.
“When you look at the composition of growth it was a little less encouraging,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “We’re very much stuck in that subpar pace of growth at around 2.5 per cent. I think this is where we’re going to be for the next little while.”
The local dollar was little changed despite the stronger growth data and traded at 73.12 US cents at 12:51pm in Sydney from 73.25 cents before the release.
Exports surged 4.6 per cent in the third quarter; largest increase since the same quarter of 2000, adding 1 percentage point to GDP growth.
Household spending rose 0.7 per cent in the third quarter, adding 0.4 point to the expansion.
Construction
Reflecting the unwinding of resource investment, nondwelling construction fell 5.3 per cent, subtracting 0.4 per cent from GDP growth while machinery and equipment dropped 4.6 per cent, subtracting 0.2 per cent.
The nation’s household savings ratio fell to 9 per cent in the third quarter from 9.4 per cent three months earlier, it showed. Compared with a year earlier, the economy expanded 2.5 per cent in the third quarter, the report showed. The median forecast of economists was for a 2.4 per cent rise.
Reserve Bank of Australia Governor Glenn Stevens, speaking in Perth, described the growth figures as “not a bad outcome” as they were slightly above what the RBA had expected.