March Quarter GDP Soft as Trade and Government Spending Masks a Nervous Private Sector
March Quarter GDP Soft as Trade and Government Spending Masks a Nervous Private Sector: CCIQ
The Chamber of Commerce and Industry Queensland (CCIQ) notes the country’s reliance on government spending and resources exports have been the driving force behind Australia’s growth over the last 12 months.
CCIQ Head of Industry, Dan Petrie said the report can be summarised in two parts; an accommodating fiscal policy stance by the Federal government and elevated commodities prices that have allowed Australia to record positive growth whilst masking low levels of private capital investment. This has been particularly evident in the Queensland.
“Federal government spending as well as the resources industry continues to underpin Australia’s record economic run whilst soft conditions in the private sector remain a concerning in terms of the country’s near term growth prospects.
“State and local government spending fell in the first quarter and whilst political uncertainty has been a dominant theme for business in the last two years it is fair to say that the lack of major private sector projects will become the dominant issue for the local policy makers over the next 12 months,” Mr Petrie said.
Queensland was the best performing region nationally on a relative basis, with state final demand increasing 0.7 % over the quarter ($430 million), supported by strong growth in public and private sector gross capital formation as well as household consumption, which was offset by total government spending.