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March quarter national accounts

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NO. 46





The Treasurer, Mr Howard, said today that the preliminary

March Quarter National Accounts provided encouraging

evidence of continued progress towards the restoration of

balanced economic growth in Australia.

The Treasurer noted that the recorded growth in non-farm

product in the March quarter of 2.6 per cent had much more

than offset the recorded fall in the December quarter of

0.5 per cent. Over the year to the March quarter, real

non-farm product had grown by 4.6 per cent. .

The Treasurer noted that there had been a marked upward

revision to the product estimate for the December quarter.

Taking this together with the large statistical discrepancy

in the March quarter estimates, and the volatility in the

discrepancy in recent quarters, it was clear that caution

should be exercised in interpreting quarterly movements

in the expenditure aggregates.

In commenting on the growth in non-farm product of

1.3 per cent for the six months to March, the Treasurer

pointed to the turnaround in stocks as a major factor

slowing the rate of growth from 2.3 per cent in the previous


half-year. In the absence of stock decumulation, non-farm

product would have risen by 2.9 per cent in the half-year to


Final demand had risen by 2.2 per cent in the latest

half-year following almost no change in the previous half­

year. All final expenditure components except dwelling

investment had contributed to this strengthening.

While the balance of trade in goods and services weakened

in the March quarter, this appears to have been largely a

result of the timing of shipments. In the latest half-year

exports rose by 3.8 per cent and imports fell by 3·5 per cent

on balance contributing 1.2 per cent to growth in gross

domestic product*

Mr Howard said that one particularly pleasing aspect, of

the latest estimates was the recovery in the profit share

from 13*5 per cent in the previous half-year to 14.3 per cent

The gross operating surplus of trading enterprise companies

had grown by 11.3 per cent in the latest half-year; while

this held back the moderation in the rate of increase of

prices, the improvement in profitability was a prerequisite

for sustainable growth in activity and, as such, was to be

welcomed. '

In any case, even with the recovery in the profit share,

the rise in the implicit deflator for gross non-farm product

for the year to March was only 5.9 per cent. Inflation was

continuing to be wound back.

CANBERRA ACT 15 June 1978 -