Consumer spending grew by 0.3 percent in the third quarter, easing from a 0.9 percent expansion in the previous period and matching the March quarter's five-year low. The modest increase was driven by rises in insurance and other financial services (1.6 percent), food (0.8 percent) and transport services (1.8 percent), while there were falls in consumption of operation of vehicles (-1 percent), other goods and services (-0.7 percent) and purchase of vehicles (-1.3 percent). Meanwhile, government spending went up 0.5 percent in the third quarter (vs 0.9 percent in Q2), largely supported by national government spending (1.9 percent) while state and local government consumption dropped (-0.5 percent).
Gross fixed capital formation grew by only 0.1 percent in the September quarter, the same pace as in the previous period. Public investment rose 3.4 percent with rises across both public corporations (4.8 percent) and the general government sector (2.9 percent). Meantime, private investment fell 0.8 percent, driven by non-dwelling construction (-3.8 percent) and ownership transfer costs (-4.2 percent). Partly offsetting the falls were increases in machinery and equipment (1.3 percent) and dwellings (1.0 percent).
Total inventories increased AUD 47 million, following a rise of AUD 1,223 million last quarter, driven by a build up in retail trade inventories, which exhibited its largest rise since the December quarter of 2015. Partially offsetting the result were declines in wholesale trade, manufacturing and mining.
Exports of goods and services edged up 0.1 percent in the three months to September (vs 1.2 percent in Q2), as sales of goods fell 1.1 percent, with non-rural exports down (-1.7 percent) and rural exports up (0.5 percent), while exports of services jumped 4.5 percent. On the other hand, imports of goods and services dropped 1.5 percent (vs 0.5 percent in Q2) due to lower purchases of goods (-1.9 percent), driven by falls in both consumption goods (-2.5 percent) and capital goods (-2.2 percent). There was a rise in imports of intermediate goods (0.2 percent) while imports of services were flat.
By industry, health care and social assistance output recorded strong growth (2.6 percent) reflecting ongoing public investment in health care. Growth was also observed in: professional, scientific and technical services (0.9 percent), due to strength in computer system design and related services (3.1 percent); rental, hiring and real estate services (2.5 percent) with strength across both rental and hiring services (5.5 percent) and property operators and real estate services (2 percent); administrative and support services (2.8 percent) driven by continued demand for employment, travel and other specialised services to businesses; financial and insurance services (0.8 percent), led by finance (0.6 percent); public administration and safety (1 percent); and ownership of dwellings (0.6 percent). On the other hand, construction output contracted 2.2 percent, due to heavy and civil engineering construction (-4.5 percent) and construction services (-1.9 percent); and mining shrank 0.9 percent, driven by coal mining (-6.1 percent) and iron ore mining (-0.3 percent).
Through the year to the September quarter, the economy grew 2.8 percent, after a downwardly revised 3.1 percent expansion in the previous period and below expectations of a 3.3 percent growth. It was the weakest annual pace of expansion since Q4 2017.