Friday saw the (rather delayed) release of the September quarter Queensland State Accounts from Treasury, and they appear to have slipped under the radar somewhat. While the ABS produce Gross State Product (GSP) data only on an annual basis for the June quarter, the QLD Treasury produce quarterly estimates. We have previously seen some disparity in these two measures, although new revisions to the Treasury data address much of that disparity from the 2015-16 data.
Firstly, if we consider the data for the 2015-16 year. When the original data for the June quarter was released by the Treasury they showed a GSP growth rate of 3.3% over the course of the year. The ABS data, released a few weeks later, had that growth pegged at just 2.0%. We wrote at the time (see here) about the reasons for the discrepancy and suggested that the figure was likely to be closer to 2.6% for the year. We are therefore not at all surprised to see revisions in the Treasury data which have taken the annual figure for 2015-16 down to growth of 2.4% (which is the same rate as national Trend GDP growth for that quarter) .
And so to the latest September quarter (and the first for the 2016-17 financial year). The annual GSP growth rate from the Treasury data has dipped to 1.9% (compared to a national GDP Trend growth rate of 2.6%). On a quarter on quarter basis the Q2 data was revised down to +0.4% (from +1.2%) and Q3 is up 0.5%. Unfortunately the Treasurer’s media release on Friday (see here) said that this 0.5% q/q growth was “substantially stronger than the rest of Australia with only 0.2 per cent“; apparently without realising that the national Q3 data has already been revised by the ABS to show a growth rate of 0.4%.
So what we can certainly see is that the recovery in Queensland is well in place. GSP has now increased for each of the past 8 quarters although, at an average of just over +0.5% q/q over that period, we are clearly a long way from the mining investment fueled boom-times.
Net exports have been, and will continue to be, a huge part of that recovery story. Five years ago net exports were deducting some $35 bn per year from our GSP; today the net export position is in balance over the year (actually a tiny $10 million deficit). Given that annual GSP for Queensland is in the order of $317 bn we can see that a $35 bn swing in net exports has played a huge role.
Household consumption (the largest single component of GSP) continues to move ahead nicely; up 2.8% for the year to Sept 2016. It’s also encouraging to see private investment improving. The annual slide in private CAPEX has slowed to be down just 10.1% (significantly better than the -16.7% ann seen in Dec 2015); the quarterly data has shown increases for the past 2 quarters (although business investment is up only for this quarter it is the first quarterly increase in 4 years) .