Slowest GDP growth since 1990s
Australian economic growth slowed to 1.0% p.a. in the June quarter of 2024. Excluding the pandemic, this is the slowest annual growth rate since the end of the 1990s recession.
GDP per person continued to decline for the sixth consecutive quarter, falling 0.4%. Households have been severely affected by high interest rates and household savings remain low.
Rising levels of government spending has played a key role in preventing the economy from contracting.
Weaken business investment
Private new capital expenditure (capex) growth slowed to 3.6% in the June quarter 2024. This was the lowest year-on-year rate in capex seen since March quarter 2021.
Non-mining capital expenditure significantly reduced at 2.6%, indicating investors are holding off in this economic downturn period.
The wholesale trade and real estate markets reported the largest negative capex growth as they struggled with financial pressures.
However, the ICT and telecoms sector was the strongest capex growth of the quarter at 27.8%.
Vacancies remain elevated
The national job vacancy rate is currently 2.2%. This is down from the peak of 3.1% in mid-2022, but well above the average of 1.5% in the decade prior.
The gap between the number of vacant jobs and unemployed people has widened, it is currently at 254,200.
However, the gap remains much narrower than its normal level of 500,000.
This suggests that the Australian employment market has yet to return to its normal demand and supply balance.
Hiring challenges persist for higher skills
As the vacancies overhang began to ease in 2023, so too did challenges for successful recruitment.
By mid-2024, only 55% of employers reported suffering recruitment difficulties. Significant falls are reported for lower-skilled roles, in particular sales and clerical staff.
However, there has been little movement for higher-skilled roles. Three quarters of employers recruiting for trades, and two-thirds recruiting for professionals, continue to report difficulties.
Though overall labour shortages are slowly easing, skills shortages remain acute.
Retail remained flat in July
Monthly retail turnover in Australia was relatively unchanged in July 2024. The annual turnover rose 2.3% compared with July 2023.
Retail sales for clothing, footwear, and personal accessories dropped the most at 0.5%, with department stores seeing a 0.4% decline. Household goods and other categories remained flat, with no percentage change.
The decline in sales for clothing, footwear retailers, and department stores followed a period of increased spending during recent mid-year sales events.
Farmers exit industry
There were 2,662,998 operating businesses in Australia as of 30 June 2024. It was an increase of 2.8% in the number of businesses in 2023-2024.
Agriculture, forestry and fishing was the industry that experienced the highest net reduction in the number of businesses in 2023-2024 (A drop of 1.3%, bringing the total number to 172,248).
On the other hand, transport, postal service, and warehousing have seen an increase of 8.5%, bringing the total number to 237,506.
