Australia’s average measure of gross domestic product rose just 0.2% in the third quarter of 2010, falling below economists’ predictions of 0.4%.
The September quarter result, compiled by the Australian Bureau of Statistics, is a significant downshift from the revised 1.1% growth reported in the June quarter.
According to the figures, agriculture was the only industry to make a contribution to GDP growth in the third quarter, increasing by 18.5%.
The only other sectors to experience growth were administrative services, education and the hospitality sector.
ANZ senior economist Katie Dean says the increase in hospitality comes as a surprise but shows that people would rather treat themselves to a night out than purchase big-ticket items.
“Also, the drop in administrative services shows the first signs of a rebound in business investment,” Dean says.
GDP growth was weak in manufacturing, finance and insurance, and professional services, which Dean says is not surprising.
“Continued global uncertainty can have an adverse on these industries because they’re affected by global market conditions as well as the Australian economy,” she says.
Treasurer Wayne Swan said earlier today the GDP figure is unsurprising given global economic uncertainty, the impact of the higher Australian dollar, and the easing back of stimulus.
“Today’s GDP figures are another solid result for our economy in the context of a world economy which is fragile,” Swan said.
“The Australian economy remains resilient. There are bumps in the road for our economy but Australia’s fundamentals and growth prospects remain strong.”
Swan’s claims are substantiated by a Westpac report, which states the economic outlook is positive for Australia as confidence continues to grow.
The report states: “Consumers and businesses are confident again and investment options are upbeat. A rotation towards strength in the private sector will be the key development in late 2010, into 2011.”