Since Marty’s away, no pretty graphs.
There’s not much Christmas cheer in the new GDP numbers I’m afraid. The economy grew at just 0.2% in the September quarter (the forecast was 0.3%). That’s below the rate of population growth, so economic output per person continues to fall. GDP per capita is down 5%, $2000 a year, from the peak and back to 2003 levels
Just as concerning is the source of this mediocre growth. Manufacturing is still falling, so is construction. All the growth is in the finance sector; the rest of the economy is still shrinking. Investment in new capital (houses and business capital) is still falling while private consumption is up.
Put that all together and it adds up to a simple and unsettling statement: we’re consuming more but not producing more, and we’re not investing in a more productive future. We’re buying more stuff (from overseas), spending more to buy existing houses while not building new ones, and we’re borrowing to do it.
The pitiful growth we are experiencing is not the export-led recovery our do-nothing government promised it was working towards. It is the beginning of a return to the same pattern of borrowing, housing speculation and over-consumption that got us here in the first place.
[so what about the good current account numbers yesterday? Turns out its thanks to the $1.3 billion in stolen tax we got back from the Aussie banks, not some exporting miracle]
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