Strong GDP figures hide mixed fortunes for different sectors
Gross domestic product grew by a surprising 1.3% in the March quarter, according to the latest figures from the Australian Bureau of Statistics, but not all sectors are contributing to the growth.
The ABS figures show GDP grew 1.3% in seasonally adjusted terms in the March quarter, after a revised increase of 0.6% in the December quarter.
Treasurer Wayne Swan was quick to celebrate the “stunning” figures, describing yesterday as “a great day for Australia”.
“It says something very special about our people, about our resilience, about our hard work, and about our capacity to face up to the worst that the world can throw at us,” Swan said.
“I see these figures as a victory for the optimists over the pessimists… and it puts the naysayers and doomsayers right back in their box.”
According to the ABS, growth for the quarter was driven by a 1% contribution from final consumption expenditure, and a 0.9% contribution from business investment.
Interestingly, the industries that drove growth in the March quarter were mining, professional, scientific and technical services, and financial and insurance services.
Each of these industries contributed 0.2% to growth in GDP.
Meanwhile, mining surged by 9.2% year on year, followed by financial and insurance services (up 5% year on year) and, amazingly, retail (up 2.7% year on year).
The news comes after Margy Osmond, chief executive of the Australian National Retailers Association, said male consumers are increasingly willing to spend.
“Perhaps men have been making do with one less suit a year,” Osmond told AAP.
“This year, with the prospect of extra money in their bank accounts after the federal budget, they’re heading out to buy more suits, ties and shirts,”
“Men… know exactly what they want, and tend not to wander [and] pick up a few bits and pieces here and there. They tend to shop less frequently, buy less, but spend more.”
Osmond said the growth in men’s sales is also being attributed to the new fashion-conscious 18 to 24-year-old market, who prolong shopping trips and shop for more items.
“The younger generation are often still living at home, not facing rising utility bills or mortgage payments… They still have a safe environment for spending,” she said in a statement.
But Peter Strong, executive director of the Council of Small Business of Australia, doubts whether the retail sector is in fact growing.
He also believes growth in the economy is limited to those in big business.
“They are good figures [from the ABS] and it reinforces that we have a big business economy and we have had one for a long time now,” Strong told SmartCompany.
“It is good for big business. But it still does not help those sectors where they are struggling, and sectors where big business dominate in a way that is not good.”
“I am talking about retail particularly and the finance sector. I am not sure how much the figures are shared across the business economy. I tend to think it is not.”