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December quarter national accounts

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The National Accounts estimates released today by the

Statistician record strong overall growth in economic

activity in the past half-year.

Non-farm product grew by 1.3 per cent in the December quarter

1979 following growth of 2.5 per cent in the September quarter.

The extent of recent revisions in the National Accounts

estimates underscore the need for caution in interpreting

the latest trends in the estimates. However, the strong

growth of 2.5 per cent in non-farm product in the last half­

year is broadly consistent with the strong growth in

employment that has been recorded over this period and the

good profit results currently being announced in company

interim reports for the first half of 1979-80.

There thus appears to have been somewhat stronger growth in

activity in the first half of 1979-80 than had been expected

at Budget time.

2 .

The growth in the second half of 1979 has been

substantially due to a marked strengthening in exports

and a sizeable increase in non-farm stocks. While there

has been no growth in final idomestic demand over this

period, a resumption can be expected in the next half

year. 1

Exports have risen by 22.3 per cent over the course of

1979 while imports have only risen by 1.0 per cent.

Non-farm stock accumulation has contributed 1 .5 per cent

to the 2.5 per cent growth in non-farm product in the

last half year.

Private consumption expenditures, which firmed in the

December quarter, are likely to be assisted by the removal

of the PAYE tax impost from 1 December last.

Business fixed investment expenditures have fallen by

6.5 per cent in the past half year but investment anticipations

data point to a marked improvement in the current six months.

The 11.3 per cent rise in the gross operating surplus of

companies over the course of 1979 will help further stimulate

investment expenditures.

The non-farm product deflator rose by 0.9 per cent in the

December quarter to be 8.1 per,cent above its level a year


Much of the improvement in economic activity over the

course of 1979 owes to the marked recovery in the international

price competitiveness of the manufacturing sector over recent


years which, in turn, has largely been a result of the

disciplined approach that the Government has been taking

to managing the economy. Australia can expect continued

steady growthIif those policies are maintained.


10 April 1980