Australian GDP Expands 1% on Construction, Mining Boom

Marcus Jacob
07 Dec, 2011
New York City

Australian stocks resumed the advance after the release of the third quarter economic growth data. The economy expanded 1% in the quarter and surged 2.5% from a year ago quarter on the continued boom in construction and mining sectors.

[R]8:00 PM Sydney – Australian stocks resumed the advance after the release of the third quarter economic growth data. The economy expanded 1% in the quarter and surged 2.5% from a year ago quarter on the continued boom in construction and mining sectors.[/R]

Australian stocks traded higher after the release of gross domestic product data was better than expected. Banks were under pressure but rebounded on the hopes that the euro zone leaders will offer concrete measures at the summit later in the week.

Australia’s economy in the third quarter expanded at 1% and the second quarter growth estimate was revised higher to 1.4%.

From the year ago the economy grew at 2.5%, faster than 2.3% estimates of economists surveyed by 123jump.com as mining boom continue to attract investment.

The data released by the Australian Bureau of Statistics showed that consumer spending increased 1.2% and government spending also increased by the same. Mining industry expanded 3.7% and manufacturing industry rose 1.9% in the quarter.

Retail trade increased 0.6% in the quarter and grew at 1.4% from a year ago and construction industry added 0.4% to the quarterly growth. Mining contributed 0.3%.

The two speed economy was evident in the final demand from various states. Mining and resources heavy Western Australia showed the increase of 8.4% in the demand and in Queensland 3.5%. Demand in New South Wales increased 0.5% but declined 0.1% in Victoria.

The ASX 200 index rose 30.5 or 0.7% to 4,351.3 and All Ordinaries index added 0.7% or 29.7 to 4,292.50.

The Australian dollar edged higher 0.3% to US$1.027 after the release of the latest quarterly GDP data.

Stock Movers

BHP Billiton Ltd added $0.31 to $37.02 and Rio Tinto Ltd increased $0.70 to $66.25. Newcrest Mining declined $0.81 to $33.18.

Fortescue Metals Group increased 6 cent to $4.88, Lynas Corporation Limited closed down 7 cents at $1.33 and Iluka Resources rose $0.88 to $15.79.

Oil Search Limited traded up 2 cents to $6.50, Santos Limited rose 16 cents to $13.52 and Woodside Petroleum added $0.18 cents to $33.66.

Orica added 3 cents to $25.88 after it resumed its production at a plant that suffered chemical leak. .

Commonwealth Bank of Australia added $0.47 to $50.17 and National Australia Bank increased 12 cents to $24.40. ANZ edged up 25 cents to $21.24. Westpac added 15 cents to $21.61.

David Jones Limited fell 6 cents to $2.84 and Wesfarmers Limited fell 20 cents to $32. Harvey Norman Holdings unchanged at $2.15.

Woolworths Limited closed up 47 cents to $25.69 and James Hardie Industries SE increased 23 cents to $7.

Qantas Airways Ltd closed unchanged $1.62, Virgin Australia closed unchanged at 35.5 cents and Flight Centre fell 25 cents to $18.69.

QBE Insurance Group Limited increased 1 cent to $14.15.