Territory economic review
NT Treasury, Economic Analysis Division
Territory economic review; Department of Treasury and Finance newsletters; PublicationNT; E-Journals
Date:2001-10; Made available via the Publications (Legal Deposit) Act 2004 (NT).; This publication contains may contain links to external sites. These external sites may no longer be active.
Northern Territory -- Economic conditions -- Periodicals
Northern Territory Government
Northern Territorty Government
OCTOBER 2001 7 TERRITORY ECONOMIC REVIEW www.nt.gov.au/ntt/economic CONSUMPTION Consumption Expenditure Annual per cent Change, 1999-00 Dollars Through-the Year to NT AUS NT AUS NT AUS Jun 1992 3.7 3.0 -3.8 -0.5 0.4 2.1 Jun 1993 4.9 1.6 9.9 2.4 7.0 1.8 Jun 1994 -0.6 2.6 7.7 1.7 3.0 2.4 Jun 1995 9.5 5.8 2.9 5.3 6.5 5.7 Jun 1996 4.7 3.3 6.6 2.3 5.5 3.1 Jun 1997 -1.3 3.2 3.2 2.3 0.7 2.9 Jun 1998 10.8 4.7 10.6 2.5 10.7 4.2 Jun 1999 2.7 4.8 5.3 5.3 3.9 5.0 Jun 2000 5.6 3.6 4.4 7.1 5.1 4.4 Sep 2000 5.1 2.8 4.9 4.4 5.0 3.2 Dec 2000 0.1 1.6 -0.6 3.1 -0.2 1.9 Mar 2001 1.0 3.2 6.4 3.3 3.5 3.2 Jun 2001 0.4 3.4 8.0 1.0 3.9 2.8 Private Consumption Public Consumption Total Source: NT Treasury, ABS data Good indicator of onshore economy Consumption accounts for around three-quarters of expenditure in the Territory. Direct onshore benefits from oil field development and production have a large impact on measured GSP, but have little short term impact on the Territory economy. Consumption expenditure is recognised as a more reliable measure of onshore economic growth than GSP. remains weak After three years of strong growth, Territory private consumption growth weakened markedly in late 2000. Following a rebound in the March quarter, private consumption expenditure moderated in the June quarter 2001, and there were significant downward revisions to data from previous quarters. Annual private consumption growth at 0.4 per cent remains weak, and well below national growth of 3.4 per cent. Total consumption has, however, been supported by strong government consumption, boosting through the year growth. in line with retail sales Growth in Territory real retail turnover (measured by quarterly chain volume estimates) has slowed over the past year, reflecting higher petrol prices, weak consumer confidence and a falling rate of population increase. Real turnover fell 0.3 per cent over the June quarter and by 2.0 per cent in year on year terms. Weak turnover reflects the overall moderation of the Territory economy as the impetus of the defence force expansion wanes. The lower year on year data also reflect the strength of the previous years December and March quarters. During these two quarters retail sales received a significant boost from the East Timor relief effort, which was followed by a stronger than usual June quarter, due to increased consumer spending prior to the introduction of the GST. Nominal retail turnover growth of 2.7 per cent (year on year to August) is less than inflation suggesting that real September quarter retail turnover growth will remain soft. interest rate cuts will help Higher interest rates in 2000 did impact upon consumption. Though rates have fallen markedly over 2001, weak consumer confidence has acted as a brake on consumption growth. The RBA has cut interest rates a further 0.5 of a percentage point in the past month to try to boost domestic demand as external demand begins to slow. Interest rates, now at 4.5 per cent (the lowest in nominal terms since 1973) are low in real terms. Low interest rates will continue to encourage additional debt-funded consumption, although the major boost to disposable income growth via reduced debt servicing costs is largely over as the likelihood of further rate cuts diminishes. Though rate cuts will help, weakness in the labour market (despite official ABS indications to the contrary) will affect household income and consumption spending. Nonetheless, in the short term the railway will stimulate employment and population growth, which should flow through to stronger consumption growth in coming quarters. HOUSING INVESTMENT Picking up from trough While monthly data are volatile, the leading indicators suggest that the sector is starting to recover, though from low levels as the chart on the next page shows. In original terms, Territory new residential building approvals decreased from 94 to 75 during August. The fall reflected the tapering off of the effect of the Territorys QuickStart scheme on private sector approvals. In trend terms no change was recorded.
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