Summary:

The GDP growth of 0.5% in the fourth quarter was weaker than my expectations;

Other indicators indicate that the economic performance is better than the GDP data at the end of last year;

The economic growth prospects for this half year should be good, but the 2023-24 fiscal year will be below the standard;

Wage growth is still very low and not a driving factor of the current inflation rate.

We recently found that the GDP grew by 0.5% in the quarter of December. This is the slowest growth rate since the September quarter of 2021, when Sydney and Melbourne were both under COVID lockdown. This rate is slightly lower than the average quarterly growth rate of 0.6%.

The slowdown in economic growth is consistent with broader evidence. The growth of credit, new orders, job vacancies, and retail trade (adjusted for inflation) all decreased in the quarter of December. According to reports, the unemployment rate has increased. The slowdown in economic momentum is attributed to an increase in the cost of living and interest rates. The flood played a role. Shortages of workers and materials have limited growth rates (and pushed up inflation).

But I think the economic performance is better than the reported growth rate. The pace of new orders has slowed down, but still above the long-term average. The shortage of workers remains the biggest constraint for enterprises, and the lack of orders is far from a problem for most people. Household spending has shown the strongest growth in discretionary areas such as entertainment and accommodation, as well as food services. The intention of capital expenditure remains firm.