Housing construction lifts Australian growth figures

Photo / APN

Australia's economic growth isn't losing pace and might have even picked up a little as the non-mining sectors of the economy start to recover.

The Australian Bureau of Statistics' (ABS) national accounts figures, to be released tomorrow, are expected to show that gross domestic product (GDP) grew 0.7 per cent in the September quarter, according to an AAP survey of 13 economists. In the June quarter, GDP growth was 0.6 per cent.

HSBC chief economist Paul Bloxham said economic growth was showing signs of rebalancing away from one that was heavily driven by mining and resources investment.

"Low interest rates are lifting the established housing market and this month brought more evidence that the upswing in residential construction is picking up pace," he said.

"Helpfully, despite slowing down, mining investment has not yet fallen away sharply and it has levelled out which is allowing more time for growth to rebalance."

JP Morgan Australia chief economist Stephen Walters said September quarter capital expenditure (capex) data, released last week, showed that growth was slowly strengthening.

Business investment rose by 3.6 per cent in the September quarter, better than the 1.2 per cent fall the market was expecting.

"The partial reads on activity so far have been strong and remove much of the downside risk to third quarter GDP," Mr Walters said.

"Last week's capex report was particularly upbeat, although we don't believe the composition lends itself to any substantial forecast upgrades.

"Elsewhere, construction work increased in both the engineering and construction sectors, while the retail volumes report revealed a much-needed bounce in the third quarter."

The median market forecast for economic growth in the year to September is 2.5 per cent, from 2.6 per cent in the 12 months to June.

- AAP