Yesterday, the government revealed the Australian National Accountants experienced 1.1 per cent growth for the last quarter of 2016, resulting in 2.4 per cent annual growth for the 2016 calendar year.
KPMG chief economist Brendan Rynne said that the 1.1 per cent GDP growth was unexpectedly high, and came from 0.5 per cent growth in household consumption, 0.1 per cent growth in investment, 0.3 per cent growth in government and 0.2 per cent growth in net exports.
“Net exports made a strong contribution, while many state governments spent a lot more on capital expenditure, with Victoria, Queensland, South Australia and Tasmania all with double-digit increases,” Mr Rynne said.
“Government capital expenditure spend as a whole was up 8 per cent quarter-on-quarter, and 12 per cent year-on-year. On a sector basis, growth in agricultural production has been massive, recording a 24 per cent improvement [year-on-year].”
Other sectors that experienced strong growth over the past 12 months, according to Mr Rynne, included iron ore up 9 per cent, coal up 6 per cent, professional services up 7 per cent, and finance/insurance up 4 per cent.
While this is positive, Mr Rynne warned that Australia may not be out of the woods yet.
“There are clearly some encouraging signs. But it may not be advisable to unfurl the flags just yet,” he said.
“It should be remembered that the strong December results comes on the back of negative GDP growth in the September quarter 2016, a result which was dragged down by a significant reduction in public sector consumption and investment expenditure.”
Mr Rynne said that the negative 0.5 per cent growth in the September 2016 quarter will act as a drag on the annual figure until it rolls out of the annual growth calculation.