In the second quarter of 2016, final consumption expenditure grew by 0.8 percent, adding 0.6 percentage points to GDP growth. Household spending rose 0.4 percent while government expenditure increased by 1.9 percent. Gross fixed capital formation was flat. Private investment fell 3.4 percent, driven by a 12.4 percent drop in non-dwelling construction. Public investment rose 15.5 percent, largely due to a 21.0 percent increase in state and local general government. Exports of goods and services went up 1.3 percent while imports of goods and services grew at a faster 2.7 percent. Net exports detracted 0.2 percentage points from GDP growth. The change in total inventories was an increase of AUD 706 million in seasonally adjusted terms compared to a decrease of AUD 477 million in the December quarter, contributing 0.3 percentage points to GDP. This increase was driven by a rise in wholesale trade inventories.
By industry, positive contributions came from wholesale trade (+1.7 percent, driven by strength in motor vehicle and motor vehicle parts wholesaling and machinery and equipment wholesaling); rental, hiring and real estate (+3.1 percent, driven by property operators and real estate services); professional, scientific and technical services (+3.2 percent with strength evident in non-engineering related professional, scientific and technical services) and administrative and support services (+2.3 percent). In contrast, agriculture, forestry and fishing shrank 3.8 percent (driven by falls in grains, cotton and milk production), followed by mining (-3.5 percent, due to a 4.8 percent decline in iron ore mining, a 1.7 percent drop in oil and gas extraction and a 1.4 percent fall in coal mining) and construction (-0.8 percent, due to weakness in heavy and civil engineering and construction services).
Through the year, the economy grew by 3.3 percent, accelerating from a 3.1 percent in the March quarter while market estimated a 3.4 percent growth. It was the strongest expansion since the June quarter 2012, bringing the annual growth of 2.9 percent for the 2015-2016 financial year and going 100 quarters without experiencing a technical recession. In trend terms, the largest contributors to the economy came from mining (+0.8 percentage points), financial and insurance services (+0.5 percentage points), construction (+0.2 percentage points), public administration and safety (+0.3 percentage points)and wholesale trade (+0.2 percentage points). In contrast, the largest detractor was manufacturing (-0.2 percentage points).
Real gross domestic income increased by 0.6 percent, while the volume measure of GDP increased by 0.7 percent, the difference reflecting a decrease of 0.4 percent in the terms of trade in trend terms.
Real net national disposable income increased by 1.1 percent quarter-on-quarter. Through the year the income rose 2.1 percent compared with a 3.1 percent growth for GDP.