Australia’s economy has rebounded sharply from a coronavirus-fuelled recession, driven by a surge in consumer spending as restrictions eased.
The nation’s gross domestic product (GDP) jumped 3.3% in the three months ending September, following a record 7% decline in the previous quarter, according to recently released data from the Australian Bureau of Statistics (ABS).
Economic activity, however, declined 3.8% compared to a year earlier.
According to ABS data, growth was spurred by an increase in household spending, which swelled 7.9% from July to September as containment measures across most of the country were relaxed. This was reflected in the 9.8% rise on consumer spending on services, including hotels, restaurants, and other recreational activities. Demand for goods also climbed 5.2% during the period.
Victoria was the only state to record a drop in household spending, falling 1.2%, as tighter restrictions were imposed due to a resurgence in coronavirus infections.
Greg Moshal, chief executive officer of online lender Prospa, said the GDP expansion was a positive sign, especially for SMEs looking for growth capital.
“New lending in the quarter saw hospitality increase by 361%, professional services increase by 303%, retail increase by 152%, and building and trade increase by 126% on the prior quarter,” he said.
“That’s a good indication of a solid rebound and we’re seeing the boost in confidence and demand continue into the busy holiday season.”
According to ABS figures, worker compensation also rose 2.3% during the quarter as the number of those employed increased. Household saving-to-income ratio was at 18.9%, a slight dip from the 22.1% in the second quarter when consumer spending collapsed.
Meanwhile, net trade dropped 1.9 percentage points from GDP, the largest since the third quarter of 1980. Imports of goods and services went up in the three months ending September, reflecting a rise in demand in consumer goods as restrictions were lifted.
However, exports fell particularly because of weaker demand for Australian mining commodities and constraints on travel, according to the ABS.