Australia's gross domestic product was down a seasonally adjusted 0.5 percent on quarter in the third quarter of 2016, the Australian Bureau of Statistics said on Wednesday.
That missed forecasts for a decline of 0.1 percent following the upwardly revised 0.6 percent increase in the three months prior (originally 0.5 percent).
On a yearly basis, GDP was up 1.8 percent – again shy of forecasts for 2.2 percent and down from 3.3 percent in the second quarter.
Economic activity contracted in a number of areas this quarter. Private investment in new buildings detracted 0.3 percentage points from GDP growth, while new engineering and new and used dwellings detracted 0.2 and 0.1 percentage points respectively.
Public capital expenditure detracted 0.5 percentage points from growth as it declined from elevated levels in the June quarter. Net exports detracted an additional 0.2 percentage points from growth. Australia's terms of trade rose 4.5 per cent through the September quarter.
The reduced building activity is reflected in the output of the construction industry which fell 3.6 per cent for the quarter and was the largest contributor to the fall in GDP growth on an industry basis.
A number of other industries also recorded below trend growth, or declined, this quarter, including financial and insurance services, professional scientific and technical services, rental hiring and real estate services and administrative support services.
The largest offset to these falls was agriculture which grew 7.5 per cent. Mining production contributed no growth, but maintained its historically high levels of production.
Subdued activity in the building industry contributed to a decline in the income of small businesses, with gross mixed income down 5.8 per cent.
Private non-financial corporation's gross operating surplus increased 1.2 per cent, supported by stronger mining commodity prices.
Compensation of employees increased 1.3 per cent, and real gross national income increased 0.9 per cent for the quarter to be 3.2 per cent higher through the year.
Also on Wednesday, the Australian Industry Group said that the construction sector in Australia continued to contract in November, albeit at a slower pace, with a Performance of Construction Index score of 46.6.
That's up from 45.7 in October, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.
All four of the sectors contracted, including apartment, house, engineering and commercial building.
Among the sub-components, new orders, employment and deliveries all contracted, while input prices, selling prices, wages and capacity utilization expanded.
by RTT Staff Writer
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