Australia reported higher than expected growth in the first quarter of 2012, up 1.3 per cent over the previous three months, far outstripping the consensus estimate of 0.5 per cent. Year-on-year, the economy has grown by 4.3 per cent, the fastest increase since the onset of recession four years ago.
Concern over the situation in China, particularly whether or not it can maintain its continued, very high, level of growth, was expected to impact more heavily on Australia's economic situation than it ended up doing, leading the chief economist at Commonwealth Bank of Australia, Michael Blythe, to comment:
Rumours of the economy's death have been totally exaggerated. It does tell you we had a decent amount of momentum in the run up to the latest round of the European woes, and it's not a bad place to be in.
The news also firms up the Australian government's plan to bring the budget back into the black for the first time in four years, with the surplus being forecast at AU $1.54bn for the fiscal year starting July 1. Treasurer Wayne Swan said:
Today's National Accounts paint an extraordinary picture of exceptional growth, and showcase the rock-solid economic fundamentals which put our economy in a league of its own. . . These figures send the loudest possible message to the world that Australia is the strongest performing developed economy bar none.
The breakdown of the figures reveals where the hotspots in the economy are. Household spending rose 1.6 percent in the first quarter, adding 0.9 percentage points to GDP growth; non-dwelling construction went even higher, up 12.6 percent, adding 1 point; but exports fell 1.3 percent, knocking 0.2 points off the expansion, and indicating that the country isn't entirely insulated from weaker situations overseas.
Wayne Cole of Reuters adds:
Australia was one of the very few advanced economies to sail through the global financial crisis without sliding into recession, largely propped up by Chinese-led demand for its coal, iron ore and other resources.
While the Chinese economy has since slowed markedly, miners continue to invest heavily in the belief demand from its urbanising millions will run for years yet.
Wednesday's data showed spending on engineering projects such as mines and liquefied natural gas jumped 20 percent in the first quarter to be up a heady 53 percent on the year. That alone added 1.1 percentage points to GDP growth in the quarter.