Australia's Economic Growth Accelerates as Exports Rebound

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Australia’s economy expanded at a faster pace than economists forecast in the three months through September, underscoring the central bank’s decision Tuesday to keep
interest rates steady.
Gross domestic product advanced 0.9 percent from the second quarter, when it rose a revised 0.3 percent, government data showed Wednesday. That compared with the median of 28 estimates for a 0.8 percent gain.
The report spans a period when Australia’s currency dropped almost 9 percent in response to record-low interest rates as the central bank sought to spur investment outside the resources industry. While mining investment continued to fall, earlier spending by resources firms is boosting output that is reflected in surging export volumes of commodities like iron ore.
“Most of the rebound reflects volatility in commodity exports, which fell sharply in the second quarter as weather disrupted shipments and have rebounded,” Kieran Davies, chief economist at Barclays Plc and a former Treasury official, said before the release. “The RBA is also expecting a rebound.”
While export volumes picked up, prices for those commodities have slumped as Chinese demand wanes.
The local dollar rose slightly and traded at 73.31 U.S. cents at 11:36 a.m. in Sydney from 73.25 cents before the release.
Compared with a year earlier, the economy expanded 2.5 percent in the third quarter, the report showed. The median forecast of economists was for a 2.4 percent rise.
Exports surged 4.6 percent in the third quarter, adding 1 percentage point to GDP growth, the report showed. Household spending rose 0.7 percent last quarter, adding 0.4 point to the expansion, it showed. Reflecting the unwinding of resource investment, non-dwelling construction fell 5.3 percent, subtracting 0.4 percent from GDP growth while machinery and equipment dropped 4.6 percent, subtracting 0.2 percent.

http://www.bloomberg.com/news/articl...xports-rebound


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