STATE OF THE NATION FEATURE
Special Edition:
Australia Officially In Recession As GDP Tanks In June Quarter Denita Wawn | CEO MASTER BUILDERS AUSTRALIA
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s foreshadowed earlier this week, the national accounts for the June quarter show that GDP fell 7.0 per cent. It’s the largest quarterly fall since GDP records began in 1959, and far more significant than the second largest GDP contraction of 2.0 percent in the June 1974 quarter. The latest fall follows a decrease of 0.3 per cent in the March quarter 2020 and means Australia is officially in a recession. Private demand collapses Private demand detracted 7.9 percentage points from GDP, driven by a 12.1 per cent fall in household final consumption expenditure. The quarter saw a 17.6 per cent fall in spending on services reflecting altered behaviour and restrictions due to COVID. Household saving to income ratio rose to 19.8 per cent from 6.0 per cent, driven by the fall in consumption expenditure. Building and construction industry The construction industry added over $30 billion to the Australian economy in the June 2020 quarter, down 8.2 per cent from the March 2020 quarter. The construction industry contracted 4.7 per cent in 2019-20 to $130 billion, its contribution as a share of total GDP dropped 0.3 per cent in 2019-20 from 7.2 per cent in 2018-19 to 6.9 per cent in 2019-20. The contribution of civil construction to the Australian economy increased 1.9 per cent in the June 2020 quarter to $6.6 billion, but due to contractions in the other quarters for 201920 is down 4.6 per cent ($1.3 billion) over the financial year. Issue Three | July-September 2020 | MBA NSW
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