Australia’s economy lost a bit of steam in the September quarter, expanding less than economists had anticipated, even as business investment and government spending continued to prop up activity. Data from the Australian Bureau of Statistics (ABS) showed GDP rising 0.4% quarter-on-quarter and 2.1% over the year, slightly below market expectations of 0.7% and 2.2%, respectively.
The latest figures suggest the country is still in a mild upswing but also brushing up against capacity constraints that are limiting how quickly output can grow. With inflation proving stickier than the central bank would like, the softer-than-hoped GDP print is unlikely to nudge the Reserve Bank of Australia toward another interest-rate cut in the near term.
AMP chief economist Shane Oliver described the numbers as “ok, but not fantastic,” noting that the economy remains heavily supported by government outlays. The ABS reported that GDP per capita was flat for the quarter, meaning overall growth largely matched the pace of population expansion.
Private investment was a bright spot, adding 0.5 percentage points to quarterly GDP. Much of that came from rising spending on machinery and equipment, driven in part by the rapid expansion of data centres as companies race to build capacity for artificial intelligence and cloud computing. Housing investment also improved, contributing 0.2 percentage points amid stronger dwelling construction and higher property turnover, especially from investors.
Household spending rose 0.5%, helped by the three rate cuts delivered earlier in the year, though the pace remained moderate. Government spending jumped 3%, buoyed by large commitments to renewable energy and water infrastructure. Trade took a small toll on growth, subtracting 0.1 percentage points as imports grew faster than exports. Mining profits, however, lifted 1.2% thanks to firmer prices and volumes for thermal coal and iron ore.