Australia’s economy grew 0.8 per cent in the three months to June, and 1.8 per cent over the past year, according to the official gross domestic product numbers from the Bureau of Statistics.
The June quarter growth rate was a big pick-up from the 0.3 per cent growth recorded in the first quarter of the 2017 calendar year.
However, there are signs that the current level of economic expansion might be unsustainable.
Domestic spending was a key contributor to growth, rising 1 per cent over the quarter driven by a 0.7 per cent rise in household consumption, which accounted for half of the overall increase in GDP.
The ABS said some of the strongest growth was spending on food, clothing and household furnishings.
But this spending came out of a dramatic decline in the household savings rate, which fell to 4.6 per cent from 5.3 per cent in the March quarter.
Dwelling construction also grew slightly, rising 0.2 per cent, but many economists believe it is already starting to decline from a record peak.
There was also a slight decline in nominal GDP growth over the quarter — that is a measure of how much Australia earned for what it produced, not just how much it produced.
This was the result of a fall in commodity prices wiping 6 per cent from Australia’s terms of trade, according to the bureau’s chief economist Bruce Hockman.
“Recent swings in coal and iron ore prices have had significant effects on the Australian economy in terms of export revenues and real incomes, though export volumes continued to grow in the June quarter,” he wrote in the report.
On a more positive note, businesses increased their investment, raising the hope that jobs growth will continue to strengthen.
“Recent indicators showing increased business confidence appear to be reflected by the 3.2 per cent quarterly increase in purchases of new machinery and equipment as well as increases in the previously published June quarter employment and hours worked estimates,” Mr Hockman observed.