The Australian economy expanded by 0.6 per cent in the three months to the end of September as households spent up on new cars and trips to local cafes while reducing their COVID savings.
The Australian Bureau of Statistics on Wednesday reported annual economic growth lifted to a lower-than-expected 5.9 per cent through the past 12 months. Most economists, the Reserve Bank and Treasury expect economic growth to slow through the next year.
The bureau said household spending lifted by 1.1 per cent in the quarter, driven by discretionary goods and services.
Spending on hotels, cafes and restaurants grew by 5.5 per cent while expenditure on transport services increased by 13.9 per cent. Purchases of cars jumped by 10.1 per cent as COVID-related backlogs started to ease.
While spending was up, the household saving ratio fell to 6.9 per cent from 8.3 per cent. This ratio hit 23.5 per cent in the early stages of the pandemic.
The bureau’s head of national accounts, Sean Crick, said household spending again drove GDP growth.
“Households continued to increase spending on domestic and international travel as COVID-19 travel restrictions continued to ease. Spending on new vehicle purchases increased as international supply chain constraints eased, enabling an increase in vehicle imports,” he said.
By industry, the construction sector added 0.2 percentage points to overall growth. Mining, the hospitality sector, administrative support and professional services all added 0.1 percentage points.
The manufacturing sector went backwards, detracting 0.1 percentage point from growth.
Among the states and territories, growth was strongest in the Northern Territory with state final demand – which excludes exports and imports – up by 2.7 per cent.
NSW state final demand lifted by 0.7 per cent while it was flat in Victoria due to sharp falls in government spending.