You probably listen to this podcast because you’re interested in property, money, and success, and while today we will be talking about Australia’s economy, what we discuss really relates to all of these.
You see... despite all those interest rate rises the Reserve Bank has been throwing at us trying to slow inflation and our spending, Australia’s GDP expanded at the fastest annual rate this century in the September quarter as the economy accelerated from Covid-related lockdowns a year earlier.
So today, I'd like to share with you 13 things you need to know about our economy as I chat with Ken Raiss, director of Metropole Wealth Advisory.
But don't worry, this won't be a heavy discussion.
We want to give you the type of information you need to understand so you can know what's ahead for 2023, as this will affect our property markets and your hip pocket, including your wages.
Here are 13 things to know about the Australian economy
- Our economy grew 0.6 per cent during the September quarter of 2022 and 5.9 per cent compared to last year
Despite this year’s steep rise in interest rates, Aussies keep spending, and this consumer cash splash continued driving robust growth in the national economy.
This was the fourth consecutive quarter of growth since the COVID-19 Delta variant lockdowns.
Household consumption drove the increase, growing 1.1 per cent.
- We spent more and saved less.
The household saving rate continued to fall, reaching pre-pandemic levels.
Households saved 6.9 per cent of their income during the quarter, compared to 6.8 per cent in the December quarter of 2019. This was despite a large increase in the compensation of employees.
- Consumer prices rose 1.8 per cent during the September quarter of 2022 and 7.3 per cent compared to last year.
This was the fastest annual increase in CPI since 1990.
The major drivers of consumer price increases during the quarter were housing, gas, and furniture.
- Wage growth continued to trail inflation
..but showed signs of strengthening in response to tight labour market conditions.
Tight labour market conditions, with the unemployment rate being at a multi-decade low and job vacancies at high levels, were key to the rise.
- We continued re-engaging with the world.
In the first full quarter of relaxed international travel restrictions, spending on overseas trips grew 58 per cent.
International travel reached 56 per cent of pre-pandemic levels as holidays returned to our lives.
- Airlines soared.
With pent-up demand, activity in the air transport industry rose 25.2 per cent.
The construction industry was strong on the back of major engineering and infrastructure projects and rose 2.3 per cent.
Coal mining activity has fallen for four quarters in a row.
- Domestic mobility increased.
Household purchases of transport services rose 13.9 per cent, reaching 70 per cent of pre-pandemic levels.
We purchased more cars as supply bottlenecks began to ease and imports rose.
- Our exports rode on the sheep’s back.
While wet weather hampered exports of coal, rural exports surged 9.8 per cent, led by wool and cotton.
Imports of communications equipment rose 5.7 per cent as new mobile phone models became available.
- Exports were supercharged by lithium.
Our lithium concentrates exports reached a value of $3.4 billion this quarter and were up six-fold through the year.
- Private business investment rose 2.5 per cent, led by an increase in infrastructure building.
Home-building activity rose 3.4 per cent following an uptick in building approvals, a moderation of labour and material shortages, and an improvement in weather conditions.
Government construction fell as quarantine facilities in Queensland and Western Australia was completed.
- Profits of financial corporations rose 4.9 per cent during the quarter.
Rises in the cash rate during the quarter saw lenders tending to pass on rate increases on loans more quickly than on deposits.
- The current account returned to a deficit
...for the first time since the March quarter of 2019 as corporate profits went overseas.
Exports rose for the second consecutive quarter, driven by both goods and services exports.
Imports rose strongly, driven by Travel services imports (up 58.0 per cent), as Australians travelled abroad.
Imports of travel services have been proportionally stronger than exports, with current levels recovering to approximately 56 per cent of those observed before the pandemic.
- Dwelling construction rebounds while ownership transfer costs fall
New and used dwelling construction rebounded in the September quarter, rising 3.4 per cent as supply chain and labour constraints started to ease.
However, there remains a large pipeline of dwelling construction.
Links and Resources:
Have a chat with Ken Raiss to ensure you have the correct asset protection strategies in place – click here
Join Ken Raiss and Michael Yardney at Wealth Retreat 2023 – find out more here
In turbulent times like we’re experiencing, why not get the team at Metropole on your side to give you holistic property and wealth advice– find out more here
Why not get your bundle of E-books and resource is as my gift for subscribing to this podcast www.PodcastBonus.com.au
“Being a trustee, that is a document with words and clauses, and that can be amended, it’s not a set and forget thing.” – Michael Yardney
“The financial services sector is doing pretty nicely.” – Michael Yardney
“Money’s important in those areas where it’s important, and not at all important in those areas where it’s not important.” – Michael Yardney
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