GDP figures show tough going for business

National accounts figures for the March quarter released today shows a feebly performing economy, reflecting the difficult conditions facing business according to the Australian Chamber of Commerce and Industry.

The continuing shrinkage of GDP per capita is a clear indication that conditions are moving in the wrong direction.

The figures only serve to highlight the need for significant economic reform to lift productivity in the economy.

Data from the Australian Bureau of Statistics (ABS) shows the economy as a whole barely grew over the March quarter at 0.1 per cent, with a revised annual figure of just 1.1 per cent.

The deterioration of the economic situation continues to be masked by strong population growth.

GDP per capita went backwards by 0.4 per cent, the fifth consecutive quarter in which this measure has been in reverse.

Productivity levels continue to stagnate, with the national accounts showing GDP per hour worked declining from 0.5 percent growth to zero in the March quarter.

The national accounts show new business investment fell by 0.7 per cent this quarter.

Cost of doing business pressures are mounting, and businesses margins are being squeezed, with gross operating surplus of private corporations down 7.3 per cent in the year to 2024.

Businesses need more confidence that policy settings are supportive of investment.

More support is needed to drive business investment, which is essential to restoring productivity growth and reigniting the economy.

The large-scale industrial relations changes enacted over the last two years are making the economy less flexible and productive, with the full effects to impact on business over coming months and years.