The country now recorded 101 quarters between the June 1991 and the 2016 December quarter without two straight quarters of negative economic growth.
In the December quarter 2016, final consumption expenditure rose 0.7 percent. Household spending went up 0.9 percent, adding 0.5 percentage points to GDP growth. This was driven by a rise in food (1.2 percent), recreation and culture (1.2 percent) and insurance and other financial services (1.3 percent). Meanwhile, government expenditure was flat.
Gross fixed capital formation increased by 2.6 percent, adding 0.6 percentage points to GDP. Public investment went up 7.7 percent, driven by defence (34.2 percent) and commonwealth public corporations (41.0 percent). Private investment rose 1.5 percent with non-dwelling construction up 2.3 percent. It was the first rise in non-dwelling construction since the June quarter 2014.
Exports of goods and services rose 2.2 percent. Exports of goods rose 2.6 percent, with non-rural exports up 2.6 percent, rural exports up 8.3 percent and non-monetary gold down 9.4 percent. Exports of services rose 0.6 percent. Imports of goods and services increased by 1.4 percent. Imports of goods rose 1.2 percent, driven by a rise in capital goods (8.4 percent). In contrast, non-monetary gold fell 19.3 percent, followed by intermediate goods (-0.5 percent). Imports of services were up 2.3 percent. Net exports contributed 0.2 percentage points to GDP.
The change in total inventories was an increase of AUD 552 million in seasonally adjusted terms following a rise of AUD 1,228 million in the last quarter. This increase was driven by rises in wholesale trade and retail trade inventories. A run down in mining inventories of AUD 717 million partially offset the rise. It was the largest decline in mining inventories since June quarter 2008 and can be attributed to producers taking advantage of high prices for mining commodities during the quarter. The change in inventories detracted 0.2 percentage points from GDP growth.
By industry, agriculture, forestry and fishing rose the most by 8.3 percent (driven by rises in grains, cotton and livestock production and there was a positive contributions from decreased input costs), followed by mining (3.4 percent, mainly due to a 4.7 percent rise in iron ore mining, a 4.4 percent rise in oil and gas extraction and a 3.2 percent increase in other mining), wholesale trade (3.0 percent, driven by rises in basic material wholesaling and motor vehicle and motor vehicle parts wholesaling), and professional, scientific and technical services (2.4 percent, driven by rises in both subdivisions). In contrast, a decline was seen for: manufacturing (-1.2 percent, largely due to a 7.4 percent fall in machinery and equipment and a 3.3 percent in metal products) and construction (-1.2 percent, driven by falls in heavy and civil engineering and construction services).
Through the year to the December quarter, the economy grew by 2.4 percent, faster than a 1.9 percent expansion in the September quarter and above consensus of a 1.9 percent growth.
Real net national disposable income increased by 2.9 percent quarter-on-quarter. The terms of trade increased by 9.1 percent from the prior quarter, due to strong price increase in coal and iron ore. It was the fastest growth rate experienced in the terms of trade since June Quarter 2010. Compared to the December quarter 2015, the terms of trade rose 15.6 percent.