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The release by Queensland Treasury of the State Accounts for the third quarter of 2018 appeared recently. While the ABS produce Gross State Product (GSP) data only on an annual basis at the June quarter, the QLD Treasury produce quarterly Trend estimates (albeit rather delayed). We have previously seen some disparity in these two measures, although past experience would suggest that these differences often get revised away on subsequent releases; the chart below makes the point clear.
The Treasury data shows Gross State Product lifted 0.5% q/q in the third quarter for an annual increase of 3.7%; this is an improvement from the 3.3% (Treasury) or 3.4% (ABS) estimates for the FY 2017/18.
Gross State Expenditure-GSE-(which ignores the external account) was unchanged for Q3 on a quarterly basis for a 3.1% annual increase (ABS estimates of State Final Demand were +0.2% q/q and +3.3% annual). The changes in the various components of GSE from both Treasury and ABS estimates are below;
| % chg ann Q3 ’18 | ||
| QLD Treasury | ABS | |
| Household Consumption | +2.4% | +2.8% |
| Government Consumption | +4.8% | +4.9% |
| Final Consumption | +3.0% | +3.3% |
| Private Investment | +3.9% | +3.9% |
| Public Investment | -0.4% | -0.4% |
| GSE | +3.1% | +3.3% |
Once we add the external account we see the deficit on net exports (both international and interstate) fell sharply and, as a result, added to Gross State Product growth to bring the rate to 3.7%. The improvements seen in resource exports prices (which have also added so positively to the State’s finances) have been a large part of the cause of this turnaround and have continued beyond Sept last year. We can therefore expect to see this trend being reflected in GSP data for Q4 2018 and Q1 2019 (when we eventually see it).
Contributions from the various components to the annual growth in GSP were;
The effect of the improvement in the external account is the reason for the better result in Q3 over Q2; indeed this is the first quarter since Q1 2017 that Net Exports have provided a positive contribution to GSP growth. Household Consumption accounts for almost 60% of GSP so it is clear that it is from this sector we need to see continued growth going forward. As is the case at the national level, weak wages growth, added to Queensland’s relatively weaker labour market, could well make sustained household consumption growth a tricky proposition.
We are proud to have CBC Staff Selection as supporters of the Conus/CBC Staff Selection Trend Employment and Jobseeker data series