GDP rose in the September quarter as private investment surged and households prioritised essential spending amid flat per-capita growth.
Australia’s economy expanded in the September quarter, with gross domestic product rising 0.4 per cent and 2.1 per cent over the year, according to the Australian Bureau of Statistics (ABS).
Grace Kim, ABS head of national accounts, said: “Economic growth was steady in the September quarter 2025. The rise this quarter matches the average quarterly growth since the end of the COVID-19 pandemic.
“GDP per capita was flat for the quarter as economic growth was in line with population growth but remained 0.4 per cent higher than a year ago.”
Private investment contributed 0.5 percentage points to quarterly GDP growth, driven by a 7.6 per cent rise in machinery and equipment investment. The ABS said this surge aligned with an increase in capital goods imports and reflected ongoing data-centre expansions.
“The rise in machinery and equipment investment reflects the ongoing expansions of data centres. This is likely due to firms looking to support growth in artificial intelligence and cloud computing capabilities,” Kim said.
Housing investment added 0.2 percentage points to growth, supported by higher dwelling construction and strong real estate turnover amid rising investor demand.
Household spending rose 0.5 per cent in the quarter after a 0.9 per cent rise in June. Essential spending increased 1.0 per cent, driven by payments for banking and superannuation services, electricity and health.
Meanwhile, discretionary spending fell 0.2 per cent following a strong June performance linked to the extended Easter break and end-of-financial-year sales, though it remained 2.3 per cent higher through the year.
Public investment rebounded, rising 3.0 per cent after a 3.5 per cent fall in the June quarter as public corporations led the increase through investment in renewable energy, water, telecommunications and rail transport projects.
State and local government investment grew 1.4 per cent, though it remained 2.4 per cent lower than a year earlier.
Net trade detracted 0.1 percentage points from GDP growth as imports rose 1.5 per cent compared with a 1.0 per cent rise in exports.
According to the ABS, imports were lifted by fuels and lubricants, up 9.8 per cent, and capital goods, up 6.7 per cent, with the latter driven by computer equipment used in data-centre expansions, while export gains were supported by rural and non-rural goods, while services exports were largely unchanged.
Mining profits increased 1.2 per cent despite a fall in production due to maintenance at iron ore and LNG sites as higher export prices and volumes for thermal coal and iron ore supported profitability.
Firms drew down inventories to meet export demand, contributing to a $1.9 billion rundown that detracted 0.5 percentage points from GDP growth, the Bureau stated.
Additionally, household savings strengthened, with the saving-to-income ratio rising to 6.4 per cent from 6.0 per cent in June.
Gross disposable income rose 1.7 per cent, outpacing nominal household spending growth of 1.4 per cent, with higher compensation of employees and superannuation investment income drove the lift, partly offset by income tax payable.
The ABS said compensation growth reflected minimum wage increases along with higher bonuses and redundancy payments in the private sector.
More to come…
