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The Australian economy grew by 0.4 per cent through the September quarter as the nation’s businesses started to sink more money into data centres.
In a positive sign, private investment – particularly in equipment – was the driving force of growth in the quarter.
Figures from the Bureau of Statistics this morning showed growth lifted to 2.1 per cent over the past year.
A lift in private investment, led by data centres, helped the economy expand by 0.4 per cent in the September quarter.
Economists had expected growth of around 0.7 per cent for the quarter.
“The rise in machinery and equipment investment reflects the ongoing expansions of data centres. This is likely due to firms looking to support growth in artificial intelligence and cloud computing capabilities,” ABS head of national accounts Grace Kim said.
The lift in private spending added 0.5 percentage points to the quarterly result.
Public investment lifted by 3 per cent in the September quarter and added 0.2 percentage points to the overall result, with most of this spending in renewable energy, water, telecommunications and rail transport projects.
General government spending lifted by 0.8 per cent in the quarter, although annual spending eased to a two-year low of 2.6 per cent.
Housing investment added 0.2 percentage points to growth in another sign that the property market is recovering.
Consumer spending lifted by 0.5 per cent in the quarter, down from 0.9 per cent in the June quarter.
The bureau noted that spending on essentials such as banking services, electricity and health, lifted by 1 per cent. But spending on discretionary goods fell by 0.2 per cent.
Net trade took 0.1 percentage point from growth, but the biggest impact was a change in business inventories, which subtracted 0.5 percentage points.
GDP per capita was flat through the quarter but remains 0.5 per cent higher over the past year.
The broadest measure of productivity lifted by 0.2 per cent in the quarter to be 0.8 per cent higher for the year. There was a lift in productivity in the public sector but it was flat in the private sector.
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At the state level, spending in NSW lifted by 1.4 per cent while it was up by 1.3 per cent in Victoria and 1.5 per cent in Queensland. Each recorded a lift in private capital spending of more than 3 per cent through the quarter.
Treasurer Jim Chalmers said the 2.1 per cent annual result was the fastest growth for the country in two years.
He said that private demand had now contributed more to growth than the public sector for four consecutive quarters.
“Growth and private sector activity are picking up, unemployment is low, participation is high, more people are in jobs and real wages are growing,” he said.
“This is the only quarter on record where the economy has had annual growth above 2 per cent, the unemployment rate had a four in front of it and participation was more than two-thirds of the working age population.”
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