australian economy is bouncing back?!

reported by AAP Monday, September 5, 2011


The Australian Bureau of Statistics (ABS) national accounts on Wednesday are expected to show gross domestic product (GDP) rose by 1.1 per cent, according to an AAP survey of 13 economists.

In the March quarter the economy took a backward step, with GDP falling 1.2 per cent after natural disasters crippled coal mining and other exports.

Many coal mines were closed because they were flooded and had to be drained before production and exports could resume.

The median market forecast for annual GDP expansion is 0.7 per cent for the year to end of the June quarter.

The large March quarter contraction dragged down the year-on-year figure.

Nomura chief economist Stephen Roberts said it was unlikely that Australia would have suffered two consecutive quarters of economic contraction - the conventional definition of a recession.

"It was always a quirk that it was negative at all, it was because of the floods," he said.

"It was never looking like a technical recession."

Mr Roberts said he expected the mining boom and China's hunger for Australian mineral exports to continue to drive economic growth.

"Looking further ahead, we've got the volume of exports to pick up as well.

"So as they (the mines) come back on stream properly, that's going to make quite a bit of difference to GDP numbers, too."

He said he expected growth in the September quarter to strengthen further and there were already indicators that some non-mining parts of the economy may be picking up.

The ABS reported that retail spending rose 0.5 per cent in July and new motor vehicles sales rose 8.6 per cent in the same month.

"It is interesting that at the beginning of the third quarter, retail sales started on a not-too-bad a footing and new motor vehicles was hugely strong," Mr Roberts said.

"So the third quarter at this point doesn't look too weak at all."

We do need some positive news, don't we? :-)