The Northern Territory news Sat 12 Dec 2009
The Northern Territory news; NewspaperNT
This publication contains may contain links to external sites. These external sites may no longer be active.
Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin
Nationwide News Pty. Limited
Copyright. Made available by the publisher under licence.
Nationwide News Pty. Limited
36 Northern Territory News, Saturday, December 12, 2009 www.ntnews.com.au P U B : N T N E W S D A T E : 1 2 -D E C -2 0 0 9 P A G E : 3 6 C O L O R : C M Y K Art of navigating by FORGING AHEAD: Steelwise Fabrication owner and manager Andrew Costello, in Bibra Lake, WA, is one Australian businessmen that has been taking on more staff amid a rollercoaster economic environment AT WORK: Deputy Prime Minister and Minister for Education and Employment Julia Gillard discusses Australias jobless rate yesterday. The unemployment rate fell unexpectedly to 5.7 per cent in November The impactfrom global downturn, and the policy decisions responding to it, appears to have created larger anomalies in the data than usual T rying to forecast next weeks gross domestic product (GDP) has become a bit of a stab in the dark. Not only have the components of GDP in the past few weeks been all over the shop, the Australian Bureau of Statistics (ABS) is introducing new international accounting standards for the national accounts. Thats why the September quarter report has been delayed until next Wednesday, rather than its usual release time of the first Wednesday in December. It means the data history for the series will be revised, and of course, if you dont know your starting point, its difficult to gauge where you are going. What we do know is that consumer demand was soft in the three months to September, home building has improved, business investment remains weak and government spending has been strong, especially in construction. Also, there has been a surprise jump in business inventories, while exports have slumped unexpectedly, albeit due to falling commodity prices rather than the volume of goods being shipped abroad. Commonwealth Bank economist Michael Blythes best guess is that GDP rose 0.3 per cent in the September quarter, keeping the annual rate at 0.6 per cent. Thats not a startling growth figure, but still a positive number nonetheless given what has happened in other parts of the world. Mr Blythe says the September quarter was always going to be soft. Thats because a lot of the stimulus that kept things afloat in the first part of the year was going to unwind, he said. The impact of the governments cash handouts has passed, and the more generous first homeowners grant has been scaled back. The business tax allowance also brought forward investment spending before the end of the tax year in June, so that boost will drop out the September quarter reading. A weak number was always expected, but more to do with that policy fade aspect rather than suggesting the economy was turning down again, Mr Blythe said. But it is still a mystery why business inventories stock in warehouses and on shelves will be adding substantially to growth, at least 1.5 percentage points. As Mr Blythe points out, its hard to imagine that companies would have been that positive in May and June, when the decision to lift their stocks would have been made, given the outlook was still all doom and gloom at the time. But wait, there is yet another twist in trying to estimate the September quarter GDP. And one that usually goes by without much attention. The ABS normally tries to rationalise anomalies in the GDP series during the September quarter, aided with better information on say income tax returns and population growth. However, the impact from global downturn, and the policy decisions responding to it, appears to have created larger anomalies in the data than usual. For example, Mr Blythe says while the expenditure figure of GDP rose by 2.9 per cent in the year to June, the production figure fell by 0.7 per cent. So one is saying the economy was running towards trend, the other is saying we had a full blown on recession in the past year, he said. Once a year the ABS tries to rationalise these figures. Of course you dont know exactly how that will play out. Revise up the weak bits, or revise down the strong bits, or some combination of the two, Mr Blythe said. It makes you want to throw your abacus out of the window with despair. But one thing is clear from this complex web of conflicting numbers, it isnt going to alter the course of interest rates. After all, this data is almost three months old, and a rearview mirror of where we have been, rather than where we are going. Unless of course the national accounts point to us being in a deep recession and we dont know it. But that is highly unlikely given more up-to-date numbers. Thursdays labour force numbers are a case in point. The unemployment rate fell unexpectedly to 5.7 per cent in November as more than 30,000 jobs were created, meaning that nearly 100,000 workers have joined the labour market in the past three months. Hardly the stuff of a recession. More like a boom. FORECASTING the gross domestic product has become that bit harder this time around, economics correspondent COLIN BRINSDEN reports in Canberra
Aboriginal and Torres Strait Islander people are advised that this website may contain the names, voices and images of people who have died, as well as other culturally sensitive content. Please be aware that some collection items may use outdated phrases or words which reflect the attitude of the creator at the time, and are now considered offensive.
We use temporary cookies on this site to provide functionality.
You are welcome to provide further information or feedback about this item by emailing TerritoryStories@nt.gov.au