A spread of new data shows the economy has entered the final months of 2020 in positive shape with exports rebounding, home loans at record levels and construction activity at a two-year high.
The reports came hot on the heels of Wednesday’s national accounts which showed the economy grew 3.3 per cent in the September quarter, signalling the end of Australia’s first technical recession since the early 1990s.
“The economy is changing gears once again and we are moving forward,” Prime Minister Scott Morrison told reporters in Canberra, emerging from two weeks quarantining after a trip to Japan.
The monthly trade surplus grew to $7.5 billion from $5.8 billion in October, buoyed by a larger-than-expected five per cent jump in exports.
Exports had been the weak link in the national accounts, detracting 1.9 percentage points from growth and the biggest quarterly subtraction in 40 years.
Meanwhile, other Australian Bureau of Statistics data showed the value of home loans for owner-occupiers in October rose 0.8 per cent to a record high $17.4 billion, to be more than 30 per cent higher than a year earlier.
House building was seen as the cornerstone of a further strengthening in the construction sector.
The Australian Industry Group/Housing Industry Association performance of construction index rose by a further 2.6 points to 55.3 in November.
This was second consecutive month of positive conditions and the strongest monthly result since April 2018.
Ai Group’s head of policy Peter Burn said construction activity and employment were both “decisively stronger” in the month.
While the economy expanded in the September quarter, the annual growth rate is still at minus 3.8 per cent.
Even so, Treasurer Josh Frydenberg says Australia is outperforming other developed economies like Japan, Canada, New Zealand, France, the UK and Germany.
“Not just on the economic front but also on the health front,” Mr Frydenberg told ABC radio.
“I have no doubt that as long as the virus is controlled that the economy will continue to grow.”
However, the Organisation for Economic Cooperation and Development this week urged Australia not to withdraw its fiscal and monetary policy support until the economic recovery is “well entrenched”.
Mr Frydenberg insists the JobKeeper wage subsidy will end as planned, but said other supports, like the extension of HomeBuilder and assistance for travel agents, had been announced in the past few days.
“We will continue to take the measures necessary to support the economy, but JobKeeper as a nationwide wage subsidy will come to an end at the end of March,” he said.
But shadow treasurer Jim Chalmers said programs like JobKeeper needed to be responsive to what wais actually happening in the economy.
He noted the Reserve Bank and Treasury expect unemployment to be “too high for too long”.
“What we would like the government to do is to be more flexible than their language suggests, so if it becomes clear that the labour market is weak for a longer period, that support like JobKeeper is responsive to that,” Dr Chalmers said.