Today’s National Accounts show the Australian economy grew 0.3 per cent in the March quarter, to be 2.5 per cent higher through the year.
This is very solid in the circumstances.
This is the equal fastest pace of annual growth in almost three years.
It shows how resilient our economy is at a time of substantial global economic volatility.
The biggest takeaway of today’s National Accounts is that all of the growth in the March quarter came from the private sector.
Private sector investment is booming in Australia.
Economic growth was driven by strong growth in business investment, solid consumption and ongoing growth in dwelling investment.
New public final demand made almost no contribution to quarterly GDP growth.
Annual growth in Australia is faster than almost every major advanced economy and above the OECD average.
The Australian economy is outperforming when it comes to annual growth, has stronger employment growth than almost every major advanced economy, and has lower gross debt‑to‑GDP than every single major advanced economy.
Australia is not immune from the volatility and uncertainty in the global economy, but these new numbers show we are well placed and well prepared to confront these challenges.
The largest and most significant contributor to growth in today’s figures was business investment, which recorded its fastest quarterly growth in nearly a decade and a half.
New business investment grew 5.7 per cent in the quarter to be 10.4 per cent higher through the year. It contributed 0.7 percentage points to quarterly growth.
Business investment was driven by the largest through‑the‑year rise in machinery and equipment investment in more than two decades.
While data centre investment has been strong, business investment has also been supported by the rollout of renewable energy and battery storage.
The outlook for investment is encouraging, with CAPEX survey data from last week showing the level of nominal spending was upgraded in both 2025–26 and 2026–27 to around $200 billion in each year.
CAPEX was more than six times higher than the median market expectation for the quarter.
As a share of the economy, business investment is now at 12.9 per cent, the highest in nearly a decade and much higher than the 11.3 per cent we inherited.
Business investment collapsed under our predecessors but we’re turning that around.
Annualised average new business investment is growing at 5.2 per cent under us after going backwards by an average of 1.3 per cent under them.
Business investment was the key reason why private demand grew faster than public demand in the quarter. New private final demand grew 1.3 per cent, to be 4.0 per cent higher through the year.
It contributed 0.9 percentage points to growth this quarter, which is the sixth consecutive quarter that new private final demand has contributed more to growth than public demand.
There was continued strength in dwelling investment, which for the first time in eleven years recorded its ninth consecutive quarter of growth.
Dwelling investment grew 0.7 per cent in the quarter to be 3.5 per cent higher through the year. When we came to office, it was going backwards by 3.6 per cent.
This comes after data yesterday which showed trend building approvals grew 9.8 per cent in the 12 months to April. This is another solid turnaround from the fall of 21.6 per cent when we came to office.
These figures are welcome, especially given our continued primary focus on boosting housing supply to improve affordability and homeownership.
Household consumption grew 0.5 per cent in the quarter to be 2.5 per cent higher through the year.
The data shows that households in particular were not immune from the impacts of the conflict, with elevated fuel prices contributing to operation of vehicles experiencing the largest price increase across all consumption categories, rising 1.8 per cent.
The data also showed that mortgage interest costs were up 5.1 per cent in the quarter, but the full impact of recent interest rate movements will be reflected in future quarters.
Despite these impacts, solid consumption was supported by a resilient labour market in this quarter.
Compensation of employees was up 1.2 per cent in the quarter to be 5.9 per cent higher through the year. This has again pushed the wage share of income to 54.2 per cent, up from the 49.0 per cent we inherited.
In annual terms, the National Accounts measure of prices moderated to 3.0 per cent, down from 3.2 per cent in the previous quarter.
As with recent CPI figures, these price increases remain higher than we would like but it is still welcome to see them ease in the quarter.
Public final demand made almost no contribution to growth in the quarter. It grew 0.1 per cent, to be 2.5 per cent higher through the year. This is a significant moderation from 0.9 per cent in the previous quarter.
The weakness in public final demand was partially driven by the Government’s responsible decision to end energy bill relief, which saw government consumption fall by 0.2 per cent in the quarter.
Net exports detracted 0.8 percentage points from growth. Exports fell 1.1 per cent in the quarter, as exports for iron ore and coal were impacted by weather events. Imports grew by 2.1 per cent in the quarter largely reflecting the strong business investment.
Productivity declined in the quarter but increased 0.3 per cent through the year. While quarterly productivity figures can be volatile, we are doing more in the Budget to turn Australia’s longstanding productivity challenge around.
The pickup in the private economy, driven by booming investment, is an important strength as we confront a challenging global economic environment.
Under Labor, annual economic growth is ahead of every major advanced economy, business investment is strengthening, more than 1.2 million jobs have been created, unemployment is low, participation is at near record highs and wages growth is solid.
The Budget we handed down last month was all about cutting taxes for workers, making it easier to get into the housing market, and boosting productivity.
The Budget included $3.5 billion in business tax relief to encourage even more investment and innovation in the private sector.
This Government and our Budget is very focused on resilience and reform, to respond to our economic challenges and make the most of our opportunities at a time of substantial volatility and uncertainty in the world.
There will always be those who want to talk our economy and our people down for political purposes, but these National Accounts are a very welcome and timely reminder of our strengths in challenging times.