"As the ABS has noted, even though today's data only captured the beginnings of the COVID-19 crisis, this was the lowest year-on-year result since the depths of the 2009 GFC crisis. With the economy deteriorating steeply in April and May, the drop in GDP in the March quarter suggests we are currently in the midst of the first recession in Australian since the early 1990s. This will bring to an end the record period of uninterrupted growth we have enjoyed for almost three decades.
"Despite a sizable lift to household disposable income from increased government income support, spending by households fell and saving rose as consumer confidence plummeted and as the beginnings of restrictions were felt. Non-mining business investment fell again in the March quarter bringing the annual fall to 6.6%.
"While private sector activity contracted in the three months to March – particularly in service industries. An exception was the manufacturing sector which rose relatively strongly in the March quarter on the back of the growth in demand for cleaning and sanitising products and some stockpiling by households. However, as Ai Group’s leading indicator – the Australian PMI – suggests that manufacturing, as with the rest of the economy, has been in deep contraction during the first two months of the current quarter," Mr Willox said.
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