As the Australian economy slows, the performance of Australian industries has begun to slow in the 2022-23 financial year. Value-add, sales and profits growth are all currently declining, while employment generation remains strong and capex growth continues to increase.

Industry value-add

Growth in Australian industry value-add was 5.7% in the year to the December quarter 2023. Following a period of volatility during the pandemic, growth in industry value-add has been steadily slowing since mid-2022. While most industries are now slowing, some – such as services, arts and recreation, healthcare, and social and real estate– continue to enjoy robust post-pandemic growth.

Income and sales

Business income from sales of goods and services grew 1.6% in the year to the December quarter 2023. Sales income growth has slowed considerably following a post-pandemic rebound when it grew at 19.8% y/y in the third quarter of 2022. Sales growth remains positive for the ICT and telecoms and services sectors but has fallen in wholesale and retail trade and construction industries.

Employment and job creation

Australian filled jobs slightly dropped to 3.1% p.a. in the year to the December quarter 2023 from its highest year on year rise of 7.7% in mid-2022. Job creation has been consistently elevated since the pandemic, and remains above long-run trend. It is slower in some industries struggling with skills shortage and vacancy challenges, particularly construction, manufacturing and retail.

Capital expenditure (capex)

Non-mining capex in Australia grew 17.8% in the year to the December quarter 2023, down a peak of 23.4% in June quarter. Capex growth has been steadily increasing since mid-2022, bucking a declining trend seen in other industrial indicators. Manufacturing, construction, and utilities all report high capex growth, while the transport and financial and insurance sectors are low outliers.

Gross operating profits

Non-mining business profits grew 8.8% in the year to the December quarter 2023. Following a period of volatility during the pandemic, profits growth has been slowing since 2022. Most industries report slowing but still positive profits growth, with wholesale trade one of the few to see profits decline (-5.7%) over the last year.

Explanatory note on Australian industrial indicators

Industry value add measures the value of industry output less the value of intermediate inputs. It provides an indicator of how much economic output is being generated by an industry.

Income from sales of goods and services measures the value of goods sales and fees from services and commissions. It provides an indicator of business sales performance within industries.

Filled jobs measures the number of jobs which are not currently vacant. It includes both full- and part-time employees. Growth in filled jobs provides an indicator of aggregate job creation by industry.

Capital expenditure (capex) measures expenditure on new tangible assets, such as buildings, structures, equipment, plant and machinery. It excludes business investment on non-tangible assets. It provides an indicator of business investment in physical assets.

Business gross operating profit measures the operating profit of both incorporated (company) and unincorporated businesses. It excludes interest income and expenses, depreciation and amortisation, and financial items not related to the production of goods and services. It provides an indicator of changes in the profitability of industries, before financial factors such as cost of capital and tax are taken into account.

Sources: The data in this factsheet are derived from various ABS industry and labour surveys. Data is collected on a quarterly basis, and is typically released two months following the reference period (i.e. June quarter data is released in early September). Ai Group Research & Economics will update this factsheet as ABS data is released. Refer to notes in the charts for links to the ABS source data.

Ai Group Research & Economics Team

Website: Research and Economics Resource Centre


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