National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Joel Robinson

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Gdp Growth

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EXPERT INSIGHT

We have lifted our growth forecast for 2021 from 4% to 4.5%; the key will remain the household sector, where accumulated savings; ongoing reopening; vaccines and the boom in the housing market are likely to offset the major headwinds of reduced government support and zero net immigration.

Westpac has lifted its GDP growth forecast in 2021 from 4% to 4.5%, with the 2022 forecast holding at 3%.

The December quarter national accounts provided rich evidence of the key dynamics that will emerge as the recovery continues.

They showed continued evidence of Australia’s bounce back from the pandemic induced recession in the first half of 2020.

Growth in GDP printed at 3.1%qtr, following the 3.4% increase in the September quarter. Annual growth is now -1.1% for 2020, compared to market expectations of -2% only a week earlier.

The key components of growth – household consumption; business investment and dwelling construction all surprised on the upside.

Our forecasts for GDP growth anticipate solid ongoing momentum in those components in 2021.

Household consumption lifted by 4.3% in the December quarter 2020, significantly boosted by the reopening of Victoria where spending increased by 10.4%. Spending in the rest of Australia rose by 2.3%. This result provides compelling evidence of the “reopening” effect with Victoria contributing around 2ppts to the growth rate in household spending.
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bevans

Boom in housing market likely to offset major economic headwinds: Westpac's Bill Evans

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Expert Observer

<h2>National accounts</h2>

‘V-shaped’ recovery: The Australian economy (as measured by gross domestic product or GDP) grew by 3.1 per cent in the December quarter (consensus: +2.5 per cent) after rising 3.4 per cent in the September quarter and contracting 7 per cent in the June quarter. It was the biggest six-month lift in GDP since quarterly records began in 1959. GDP is still 1.1 per cent smaller than a year ago.

Annual result: In 2020, the economy contracted 2.5 per cent (biggest fall since 1947) after growing 1.9 per cent in 2019.

Contribution to growth: The biggest contributions to growth came from household spending (+2.3 percentage points); business equipment (+0.3pp); ownership transfer costs, dwellings, government consumption (all +0.2pp); and public investment (+0.1pp). But detracting from growth was net exports, commercial construction and inventories (all -0.1pp).

[smartcode_project:default project_id=7275]

Income: Real net national disposable income rose by 4.9 per cent in the December quarter and was up by 2.1 per cent on the year. In nominal terms GDP rose by 4.2 per cent in the quarter and rose by 0.6 per cent over the year.

Productivity: GDP per hours worked was flat in the December quarter but was up by 2.5 per cent on the year.

Industry sectors: Seventeen of the 19 industry sectors grew in the December quarter. The biggest contribution to the overall increase in output came from Agriculture, Forestry and Fishing (+0.5 percentage points) from Professional, Scientific and Technical Services and Administrative and Support Services (both +0.3pp). Output fell 1.0 per cent in Mining in the quarter with Electricity, Gas, Water and Waste Services down 0.9 per cent.

[smartcode_project:default project_id=92985]

<h2>What does it all mean?</h2>

It has been a most curious period for the Australian economy. After entering recession in the first half of 2020, the economy roared back in the final six months of the year. Clearly it has been all about Covid-19. Australian governments and the central bank responded quickly in locking down the economy and in providing the support and stimulus to families and businesses. The moves to suppress the virus were effective as were the support and stimulus measures.

<img alt="" height="977" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/record_gdp_commsec.jpg" width="1200">

The ‘V-shaped’ nature of the recovery is everywhere to see – economic growth, the job market, retail spending and the housing market. The Reserve Bank acknowledges that the recovery has been stronger than expected.

But the job is not done. The economy is still around 1 per cent smaller than a year ago. Unemployment is still too high; inflation and wage growth are still too low. But the forward indicators like job ads and business and consumer surveys are positive.

We expect the economy to rebound 4.2 per cent in 2021 after contracting 2.5 per cent in 2020. Much still depends on Aussies doing the right thing with social distancing measures. The vaccine roll-out is in the infancy. And then there is the risk posed by mutant strains of the virus.

[smartcode_project:default project_id=2772]

Stimulus and support measures are still very much required, and any scale-back needs to be carefully managed. The Reserve Bank certainly hasn’t changed its rhetoric. Rates will remain low for another three years. Bond buying will continue. Cheap loans will remain under offer to business.  

The all-important jobless rate is expected to ease from 6.4 per cent currently to 5.7 per cent by the end of 2021. While still high, clearly it is moving in the right direction. But spare capacity will remain in the job market for a few more years, keeping the cash rate anchored at 0.1 per cent.  

Craig James is the chief economist at CommSec
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We expect the economy to rebound 4.2 per cent in 2021 after contracting 2.5 per cent in 2020

Biggest economic rebound on record: CommSec's Craig James

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Expert Observer

The Q4 National Accounts confirmed a brisk rebound in activity.

GDP printed at 3.1%qtr, -1.1%yr.

This was above expectations, market median and Westpac 2.5%.

[smartcode_project:default project_id=7275]

As we had flagged, the risks were to the upside – with the expenditure partials having surprised to the high side. That is how it played out.

The key theme, the economy rebounded rapidly through Q3, +3.4%, and Q4, +3.1%, with considerable momentum into 2021.

Consumers and businesses are upbeat, state governments are spending up, the housing market is red hot and the vaccine roll-out is underway.

Success on the health front has permitted the rolling back of most, but not all, covid restrictions. Victoria emerging from a second lock-down boosted activity in Q4 and will do so again in Q1.

[smartcode_project:default project_id=92985]

The recovery broadened in Q4:

(1) home building, up 4.1%, following a +1.6% for Q3, the first gains since June 2018, in response to cheap credit and government incentives, and

(2) business investment advanced, up 2.6%, led by equipment spending, +8.1%, in response to the accelerated depreciation allowance. That follows a string of negatives.

Real estate activity (ownership transfer costs) surged a further 15.2%, after a 21.6% rebound in Q3, to be 15.3% higher over the year – with the established housing market booming.

Consumer’s ability and willingness to spend is the key dynamic – certainly the relaxing of covid restrictions provides consumers with more opportunities to spend.

[smartcode_project:default project_id=2772]

The household saving ratio spiked to 22% in Q2, on the drop in spending associated with the lock-down and the wave of government income support. The savings rate moderated to 18.7% in Q3 and retraced to 12% in Q4 and will unwind further in 2021.

The critically important point, while there was a tapering of government support in Q4, which saw business profits moderate off a high level, consumers have a sizeable savings buffer to fund a further lift in spending – and that is what they are choosing to do.

The consumer picture was largely as expected with spending posting another strong gain, led by normalising conditions in Victoria, and despite a material drag on incomes from reduced fiscal supports.

Total consumption rose 4.3%qtr to be down just 2.7%yr. Victoria posted a 10.4% gain in the quarter, spending up 2.3%qtr across the other states combined.

The spending detail was a little stronger than expected around vehicles and retail but a touch softer than expected on services.

[smartcode_project:default project_id=24323]

Around incomes, wages rose 1.4%qtr with a strong increase in employment and hours worked more than offsetting initial drags from the wind-back in JobKeeper support. However real disposable income – including small business and non wage incomes and net of interest and tax – recorded a sizeable 3.3% fall. The rise in spending was thus funded out of a reduction in new savings, the savings rate falling from 18.7% in Q3 to 12% in Q4

Public demand continues to be a growth driver, up 1.0% in the quarter and a very brisk 6.5% over the year, in part driven by the response to covid.

Net exports were a small negative, -0.1ppt, as imports roared back, +4.9%, to meet the brisk rebound in domestic demand. Inventories, in total, subtracted -0.1ppt.

In other detail, the Expenditure measure of GDP printed at 3.0%, Income at 3.3% and Production at 3.1%.

Andrew Hanlan is a senior economist at Westpac.
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Consumers and businesses are upbeat, state governments are spending up, the housing market is red hot and the vaccine roll-out is underway.

December quarter sees GDP grow 3.1%: Westpac's Andrew Hanlan's insights

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EXPERT OBSERVER 
<div>GDP growth was estimated at a seasonally adjusted -0.3 per cent for Q1, leading to the inevitably mind-numbing 'recession we had to have' headlines. Over the year GDP growth slowed to +1.4 per cent. </div>
<div> </div>
<div>Q1 could yet be revised up, of course - especially the very significant negative drag from inventories - and therefore the technical definition of a recession may yet be avoided. </div>
<div> </div>
<div>However, given that GDP growth in Q2 will clearly be severely negative this is largely semantics.</div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-Pt_Gww_Reuc/XtgnFuMgFeI/AAAAAAAA2HQ/vLAGeFkHn3M9QOwI61ZNNpoOjf5yT5T5ACNcBGAsYHQ/s640/A1.jpg" width="640" height="372" data-original-height="804" data-original-width="1381"></div>
 Nominal GDP growth over the year is floundering again. 
<div class="separator"><img src="https://1.bp.blogspot.com/-ZfLhyXG8ULc/XtgnF37tlzI/AAAAAAAA2HU/Mx852eP3OhEMtJBOxcGwPqRhzAM8SiTUQCNcBGAsYHQ/s640/A2.jpg" width="640" height="362" data-original-height="794" data-original-width="1401"></div>
 
<div>Real net national disposable income, as a proxy for living standards, has been fairly flat over the past six months. </div>
 
<div class="separator"><img src="https://1.bp.blogspot.com/-NKWTgSUhZQs/XtgnF3i7aWI/AAAAAAAA2HY/CLQfAtv0DaM99MRoKMCyFkKHUTr-cnZfgCNcBGAsYHQ/s640/A3.jpg" width="640" height="368" data-original-height="804" data-original-width="1394"></div>
 And the terms of trade have held up well to date, well above the long-run average. 
<div class="separator"><img src="https://1.bp.blogspot.com/-HXTaXlH0wVI/XtgnGmiASCI/AAAAAAAA2Hg/GtnNP1jk36kKzW5yBz4CndeKKYu-AX0eQCNcBGAsYHQ/s640/A5.jpg" width="640" height="378" data-original-height="800" data-original-width="1348"></div>
 
<div>Meanwhile, the interest payable on dwellings continues to fall, now down to the lowest level since 2009 despite the dramatic increase in the dwelling stock over that time.</div>
 
<div class="separator"><img src="https://1.bp.blogspot.com/-MgkJhBkDCVg/XtgnGUlHiqI/AAAAAAAA2Hc/AKW1kQicX989EsVNqJ18tMPoeYSvBpyeQCNcBGAsYHQ/s640/A4.jpg" width="640" height="376" data-original-height="803" data-original-width="1364"></div>
 
<div>Stimulus mixed</div>
<div> </div>
<div class="separator"> </div>
<div>With the Reserve Bank fading quietly into the background, the government must now do the heavy lifting with its fiscal stimulus.</div>
<div> </div>
<div>The Aussie dollar has accordingly soared back towards US 70 cents, in turn slowing the adjustment process. </div>
<div> </div>
<div>The terms of the $688 million renovation stimulus missed the mark completely, leaving such a skinny cohort of prospective qualifying applicants that the government needn't have bothered with it. </div>
<div> </div>
<div>Essentially you must own a house and undertake an expensive renovation within the next few months, but without having a high income (while a whole heap of renovation options are excluded): </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-F-4fNLv_G3U/XtgoiKsKFjI/AAAAAAAA2H4/wHgQFtbv05Ixdzimj9Xru2Jnvr8LUCxXQCNcBGAsYHQ/s640/rebo.jpg" width="640" height="606" data-original-height="723" data-original-width="762"></div>
<div>
 Perhaps some retirees might qualify for a grant, and maybe a few young homeowners with wealthy parents. 
</div>
<div>The terms of the HomeBuilder grant scheme for new homes are far better targeted, and will undoubtedly be a net positive for the industry. </div>
<div>
 PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
</div>
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pwargent-M4siyDbqQY

GDP headed down, recession all but locked in: Pete Wargent

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Mainland China’s rebound accelerates as HSBC Global Research raises GDP growth forecast from 1.7 per cent to 2.4 per cent.
Infrastructure and property investment seem set to be the most important drivers of GDP growth, according to the banking corporation.
Private consumption, however, is likely to continue to lag behind as demand has yet to pick up. 
"Households facing job-market uncertainty are saving more and likely to stay cautious as virus risks remain", Chief China economist Qu Hongbin reported. 
"We thus expect year-on-year rises in retail sales of only 1.3 per cent in the third-quarter and 6.3 per cent in October-December."
Infrastructure investment has recovered sharply, funded by 4.75 trillion renminbi (AUD947 billion) of special government bonds, and is set to grow by 15 per cent compared with a year earlier.
Fuelled by credit availability and a quick recovery in real estate transactions, property investment has experienced a similar rebound.
Hongbin noted the government deficit, 3.3 per cent of GDP in the first half of this year, is likely to increase to 7.7 per cent in the second half.
This will provide strong support for further economic recovery.
The HSBC report noted the banking corporation still expect 7.5 per cent growth next year.
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j.ballantyne1990-6AQqhLzZaK

China 2020 GDP forecast raised to 2.4 per cent: HSBC Global Research

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The Australian GDP fell 0.3 per cent in the March quarter, seasonally adjusted, according to figures released by the ABS.
That sees growth slow to 1.4 per cent through the year, the slowest through the year growth sine September 2009 when Australia was in the middle of the GFC.
The 0.3 per cent decline was the first quarterly pullback since 2011.
Private demand detracted 0.8 percentage points from GDP, driven primarily by a 1.1 per cent fall in household final consumption expenditure. 
Spending on services fell significantly, particularly where restrictions impacted most severely, such as air transport services, hotels, cafes and restaurants, recreation and culture. 
Spending on goods rose, most notably in food and pharmaceuticals, as households prepared for the introduction of restrictions. Imports of goods fell 3.9 per cent, with falls in consumption and capital goods reflecting weak domestic demand.
Imports of services fell 13.6 per cent, with travel services falling sharply in response to the global outbreak of COVID-19 and associated travel bans.
Exports of services declined 12.8 per cent, with restrictions on overseas arrivals reducing education related travel and tourism in Australia.
The household saving to income ratio rose to 5.5 per cent, reflecting a rise in gross disposable income and falls in consumption. 
Gross disposable income was driven by a 6.2 per cent increase in social assistance benefits due to both an increase in the number of recipients and the introduction of new government support packages in response to COVID-19 and bushfires.
Economists suggest Australia is certain to enter its first recession in 29 years.
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wdavis-8cCN98p7xp

GDP falls 0.3 per cent in March quarter as COVID-19 starts to take its toll: ABS

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<div class="column">
EXPERT OBSERVATION
Headline GDP rose by 0.5 per cent in Q4 to be 2.2 per cent higher over the year, a moderate result ahead of an expected virus-driven fall in output in Q1.
 Notwithstanding a significant contribution from the recovery in housing turnover and small improvement in consumer spending, private domestic demand remains weak with falling residential construction and business investment subtracting 0.3ppt from growth. Net exports and stocks helped offset this weakness. 
While the focus of policy-makers has turned to the impact of the coronavirus on both the global and domestic economies, today’s outcome confirms a below trend pace of growth as a starting point even with the strong recovery in housing turnover, with a turnaround unlikely for some time given residential investment has yet to trough, consumer spending is constrained by weak wage growth and businesses outside of mining remain reluctant to invest.
 Factoring in an initial hit from the virus outbreak, this leads us to forecast growth to remain below trend over the next year or so, before seeing a small improvement. There is significant uncertainty about the extent and duration of the shock from the outbreak, but this outlook points to rising unemployment over 2020 and likely further action from the RBA beyond our expected rate cut in April. 
We will update our forecasts for growth, the labour market and the policy outlook next week.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/2_GDP%20Components.jpg" alt="" width="713" height="517">
In Q4, weak private demand growth was driven by a fall in dwelling investment which is now down 9.7 per cent over the year, and a decline business investment. While consumption growth improved, it also continues to track well below its long- run average, reinforcing our long-held view that tax rebates have failed to provide a significant boost to household spending.
 Indeed, part of the increase in consumption reflects extreme price discounting. Public-sector spending made no contribution following the solid outcome in Q3. Offsetting some of this weakness was a 0.1 contribution from exports - though this is a little weaker than recent quarters. A significant (though likely) temporary boost to the expenditure side came from the recovery in housing turnover which saw a boost to real estate margins. 
Both the production and income measures of GDP were slightly stronger than the expenditure measure in the quarter.
Looking forward, the magnitude of the bushfires and especially the coronavirus impact on the March quarter will be a focus, as will the ongoing impacts of the latter in subsequent quarters. For now, we have factored in a decline in March quarter GDP, but for a small recovery in quarterly growth thereafter on the assumption that the virus is quickly contained. 
As a result, we see year-average growth of 1.2 per cent in 2020 before an improvement in 2021 to around 2.7 per cent. Should the impact of the virus become more protracted this will necessarily see a down grade to our forecasts for growth. 
Notwithstanding the impact of the virus, our read is that the sluggish pace of underlying growth already warrants further policy action, with below-trend growth over the next 18 months likely to see a deterioration in the labour market with further downside risk as a result of ongoing impacts from the coronavirus.
 Indeed, we see the RBA cutting rates for a second time in 2020 at the April meeting and a significant risk of unconventional policy going forward depending on the severity of the uptick in the unemployment rate as well as the magnitude and impact of any response from fiscal policy.
Household consumption growth improved slightly in Q4, rising 0.4 per cent q/q but remains weak at 1.2 per cent y/y – the weakest pace since the GFC. The drivers of consumption growth in the quarter were increases in discretionary categories including clothing &amp; footwear, household goods and recreation and culture – possibly reflecting some impact from the earlier tax cuts.
Nonetheless, spending on discretionary items has remained weak over the year, with spending on essentials having driven the bulk of consumption growth. 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/4_Household.jpg" alt="" width="657" height="487">
Underlying business investment declined by -0.8 per cent q/q, similar to Q3 (-1.1 per cent q/q). Unlike Q3, however, weakness in business investment was driven by non-mining investment which fell 3.6 per cent, while mining investment increased by 5.0 per cent q/q.
Mining investment in Q4 was 3.2 per cent higher than the same time a year ago – the first time annual growth has been positive since 2013 other than one-off gain posted in Q3 2017. The turnaround in mining was not unexpected, but the decline in commodity prices that started towards the end of last year, now reinforced by the coronavirus shock to the world economy, casts doubt on whether this will be sustained. At the same time, weak business conditions remain a headwind for non-mining sector investment.
<div class="page" title="Page 2">
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<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/5_Business.jpg" alt="" width="564" height="377"></div>
<div class="column">
 Dwelling investment fell 3.4 per cent in the quarter driven by a fall in investment in construction (-4.1 per cent) and a fall in alterations &amp; additions (-2.2 per cent). Over the year dwelling investment has fallen 9.7 per cent. This result is unsurprising given the weakness in work done, and the ongoing weakness in dwelling approvals. These data also confirm the downturn in construction is not over. The decline was driven by a fall in NSW and QLD, though construction also declined in WA and Tas. Vic saw a small improvement in the quarter.</div>
<div class="column">
 Government demand growth slowed considerably from Q3. Underlying public demand grew by 0.1 per cent q/q, well down from 2.0 per cent in Q3. However, growth over the last year was a still solid 5.1 per cent y/y. Government consumption growth was 0.7 per cent q/q – the lowest growth since Q2 2018 due to a fall in defence spending (a volatile component) and another quarter of very modest state/local government consumption growth. In contrast, Federal non-defence spending grew by 2.4 per cent q/q (10 per cent y/y), likely reflecting disability and aged care spending.</div>
<div class="column"> </div>
<div class="column">Underlying public investment declined 2.3 per cent q/q, but this followed a 6 per cent increase in Q3, and it was 4.2 per cent higher than a year ago. Overall, the roll-out of the NDIS and large infrastructure programs still appear to be supporting the economy – and a fiscal package expected in the next week or so, will also provide additional support to Q2 data.</div>
<div class="column">
 Net exports made a 0.1ppts contribution to quarterly GDP growth even with export volumes basically unchanged in the quarter, as imports declined (-0.5 per cent q/q). Exports and imports of non-monetary gold declined substantially masking growth, overall, in other trade flows.</div>
<div class="column"> </div>
<div class="column">On the export side, there was a large increase in manufacturing exports (7.6 per cent q/q), with smaller increases in commodity exports – both rural and non-rural. Capital and intermediate goods imports increased, but services imports fell (driven by travel, which has declined in each of the last four quarters), and there was a small decline in consumption goods imports.</div>
<div class="column"> </div>
<div class="column">Over the last year, total imports have declined by 1.5 per cent, consistent with the weakness in domestic demand. Travel exports and imports will decline sharply in Q1.</div>
<div class="column"> </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/3_export.jpg" alt="" width="541" height="345"></div>
<div class="column">
 Compensation of employees rose by 1.0 per cent in the quarter (5.1 per cent y/y). While employment continued to rise, average COE per employee also increased by a moderate 0.5 per cent in the quarter. COE per hour continued to track above the WPI but saw a moderation in year-ended growth in the quarter. The boost to household income growth from tax cuts in Q3 faded in the quarter which also saw the household savings rate tick down.</div>
<div class="column">
 By industry, real estate services saw the strongest quarterly growth (up 2.7 per cent on a quarterly basis), likely reflecting the improvement in housing sales. Manufacturing (notably in food products), transport, healthcare and social assistance and mining also grew strongly, as did mining. Construction contracted 2.3 per cent on a quarterly basis, with building construction, engineering and construction services all hit down. Mining, manufacturing, transport, real estate services, public administration and health care each contributed 0.1 per cent to GDP growth in the December quarter, while construction detracted 0.2 per cent from growth.</div>
<div class="column"> </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/1_Industry%20growth.jpg" alt="" width="629" height="406"></div>
<div class="column">
 By state, the ACT experienced the fastest growth in state final demand (+0.8 per cent q/q), followed by NSW (+0.5 per cent), with the latter result largely reflecting growth in public consumption and investment spending. NT SFD rose by 0.3 per cent, its first increase since Q3 2017, reflecting a big boost in public investment and to a lesser extent petroleum exploration (perhaps driven by the end of the NT’s fracking ban). Queensland recorded growth of 0.2 per cent q/q, while Victoria saw a fall of 0.1 per cent, largely reflecting a slowdown in major road construction. SA and WA both contracted 0.2 per cent, driven by falls in private and public investment. Tasmania fell 1.0 per cent on lower public and private investment; non-dwelling construction fell 18.6 per cent on reduced energy and accommodation project spending.</div>
<div class="column">
 The slide in farm GDP was arrested in Q4 on a quarterly basis, up 0.4 per cent, although it remains lower on an annual basis (down 3.0 per cent). While the drought continued to wreak havoc in New South and Queensland in Q4, this led to higher cattle and sheep slaughter and therefore higher meat production. 2020 has brought a deluge to many Australian agricultural regions, which is very welcome relief indeed. However, this may be slow to show up in 2020 GDP as graziers rebuild herds and flocks – reducing meat production. It remains too early to say how the 2020-21 winter cropping season will perform.</div>
</div>
</div>
</div>
ALAN OSTER is the Chief Economist at NAB Group
</div>
</div>
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Coronavirus to slow Australian GDP significantly: NAB's Alan Oster

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Economists at ANZ and National Australia Bank are tipping the economy will shrink in the first three months of this year as the coronavirus and bushfires weigh down an already soft Australian economy.
The bearish assessments come as RBA governor Philip Lowe said he would be surprised it the economy shrunk in the March quarter.
ANZ estimates the impact of the coronavirus will slash 0.5 of a percentage point off March quarter gross domestic product and a smaller hit from the bushfires.
The bank forecasts the economy to contract 0.1 per cent in the first quarter, before recovering later in the year.
<div>
"The understandable travel ban in place in Australia on all foreign nationals who have been in China, as well as airline cancellations, will act to sharply reduce the level of tourist arrivals," ANZ economists said in a research note.
"There is a very wide range of uncertainties around the outlook. The virus’s timeline, the behaviour of non-China tourism, the impact on broader Chinese and global growth, and the degree to which Australians limit their travel abroad.
"While the hit to near-term growth is large, we expect the number of arrivals from China to turn around in Q2, with the rebound in tourism adding to growth in Q3 and Q4.
"Consequently, the impact on year-end growth is likely to be small."
NAB chief economist Alan Oster is also expecting a negative March quarter, suggesting that the effects of the coronavirus and bushfires will hit consumption levels, which he expects to be lower than what most economists forecast.
"We haven't put a number on it but we expect GDP to go negative in the March quarter. The question will be: is it a big negative or a small negative?"
While not officially forecasting a negative December quarter, Mr Oster said.
</div>
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Australian economy expected to shrink for first three months of 2020: ANZ, NAB

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EXPERT OBSERVER

Australians saved rather than spent most of the budget tax cuts, almost doubling the proportion of household income saved, leaving spending languishing.

The September quarter <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">national accounts</a> show that in the first three months of the financial year real household spending grew by just <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features3Sep%202019">0.1%</a>, the least since the global financial crisis.

Over the year to September, inflation-adjusted spending grew by a mere 1.2%, also the least since the financial crisis. Australia’s population grew by 1.6% in that time, meaning the volume of goods and services bought per person went backwards.

<hr>
<h2>Quarterly growth in household spending</h2>

<a href="https://images.theconversation.com/files/305094/original/file-20191204-70149-1ixi708.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305094/original/file-20191204-70149-1ixi708.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a>

Household final consumption expenditure, quarterly real growth. <a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features3Sep%202019" target="_blank">Australian National Accounts</a>

Separate figures released by the Federal Chamber of Automotive Industries on Wednesday show November new car sales were <a href="/news">down 9.8%</a> on November 2018.

By the end of November the Tax Office had issued more than 8.8. million tax refunds totalling A$25 billion, 30% more than a year before.

Instead of being largely spent, they were mostly saved, pushing up the household saving ratio from 2.7% to 4.8%, its highest point in more than two years.

<hr>
<h2>Household saving ratio</h2>

<a href="https://images.theconversation.com/files/305092/original/file-20191204-70144-nfcimx.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305092/original/file-20191204-70144-nfcimx.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a> Ratio of household net saving to household disposable income. <a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019">Australian National Accounts</a>

<hr>
Treasurer Josh Frydenberg put the best face on the result, saying whether they had been spent or saved, the cuts had put households in a stronger position.

The government’s goal has always been to put more money into the pockets of the Australian people, and it’s their choice as to whether they spend or save that money

Separately calculated <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8501.0Main+Features1Sep%202019" target="_blank">retail figures</a> show that in the three months to September the volume of goods and services bought fell 0.1%.

The disposable income households had available to spend grew an outsized 2.5%, driven by what the Bureau of Statistics said were the <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features2Sep%202019" target="_blank">budget tax cuts</a>.

<h2>Growth at GFC lows</h2>

The Australian economy grew just 0.4% in the three months to September, down from 0.6% in the June quarter, and 0.5% in the March quarter.

Over the year to September it grew <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019" target="_blank">1.7%</a>, well short of the <a href="https://budget.gov.au/2019-20/content/bp1/download/bp1_bs2.pdf" target="_blank">budget forecasts</a>, which in year average terms were 2.25% for 2018-19 and 2.75% for 2019-20.

<hr>
<h2>Real GDP growth</h2>

<a href="https://images.theconversation.com/files/305100/original/file-20191204-70126-15uhedo.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305100/original/file-20191204-70126-15uhedo.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a> <a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019" target="_blank">ABS, Commonwealth Treasury</a>

<hr>
After taking account of population growth, GDP per person grew not at all in the September quarter. Over the year to September living standards grew a bare 0.2%.

Gross domestic product per hour worked, which is a measure of productivity, fell 0.2% during the quarter and fell 0.2% over the year.

Company profits were up 2.2% in the quarter and 12.7% over the year. Wage and superannuation payments grew at about half those rates: 1.2% and 5.1%.

Housing investment was down 1.7% over the quarter and 9.6% over the year.

What household spending growth there was was concentrated on essentials, led by health and rent. So-called discretionary or non-essential expenditures fell, led down by spending on cars, dining out and tobacco.

<hr>
<h2>Consumption growth by category, quarterly</h2>

<a href="https://images.theconversation.com/files/305120/original/file-20191204-70174-1ez6pr1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305120/original/file-20191204-70174-1ez6pr1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a> Treasury definitions of discretionary and non discretionary spending. ABS, Commonwealth Treasury

<hr>
The economy was kept afloat by a surge in government spending. It grew 0.9% in the quarter and 6% over the year. Growth in government spending and investment together accounted for 0.3 of the quarter’s 0.4 points of economic growth.

<h2>Government and mining to the rescue</h2>

Mining production grew 0.7% over the quarter and 7.4% over the year. A mining-fuelled surge in exports (which eclipsed imports for the first time since the 1970s) contributed almost as much to economic growth as government spending.

Drought-affected farm production fell 2.1% over the quarter and 6.1% over the year.

Business investment fell 4% in the quarter and 1.7% over the year, led down by a 7.8% fall in mining investment in the quarter and a 11.2% fall over the year, as liquefied natural gas projects came to completion. Non-mining investment fell 0.4%.

Asked whether the December budget update would contain tax measures designed to boost business investment, the treasurer said he was in discussions with business. The update is expected in the week before Christmas.

There’s little evidence in today’s figures of the “<a href="https://www.rba.gov.au/media-releases/2019/mr-19-33" target="_blank">gentle turning point</a>” spoken about hopefully by the Reserve Bank governor as recently as Tuesday.

If things don’t pick by the bank’s first board meeting for the year in February, it is a fair bet it will cut its cash rate again. By then it will know what the treasurer did (or didn’t) do in the budget update and whether we decided to spend over Christmas.<img alt="The Conversation" height="1" src="https://counter.theconversation.com/content/128297/count.gif?distributor=republish-lightbox-basic" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" width="1">

<a href="https://theconversation.com/profiles/peter-martin-682709" target="_blank">Peter Martin</a>, Visiting Fellow, <a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>

This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/gdp-update-spending-dips-and-saving-soars-as-we-stash-rather-than-spend-our-tax-cuts-128297" target="_blank">original article</a>.
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