Australian GDP Shrank 0.5%

Darlington Musarurwa
04 Mar, 2009
New York City

Australian economy shrank 0.5% in the quarter ending in December on falling exports and weak retail sales. The economy grew in the quarter compared to a year ago, but declined from the third quarter. The sudden deterioration in the world economy has dampened the exports of minerals and metals.

[R]3:00AM New York, 7:00PM Sydney - Australia economy shrinks 0.5% in December quarter as manufacturing, retail and exports struggle in the quarter.[/R]

The Australian benchmark stock index dropped 1.6% after the economy unexpectedly declined in the three months ended December. Investors fear that Australia might slip into a recession. Vehicle sales declined 22% in February.

In Sydney trading ASX index fell 1.6% or 52.8 to 3,166.40.

Of the ASX 200 index stocks, 55 gained, 129 declined, and 16 were unchanged. Murchison Metals led gainers in the index shares with a rise of 14.9% followed by CSR Limited increasing 12%.

Australian Economy Shrinks 0.5% in December Quarter

Australia Bureau of Statistics reported today that the country’s gross domestic product fell 0.5% in the three months to December from the previous quarter but rose 0.3% from the same period a year ago.

Non-farm GDP fell 0.8% in the period, while the terms of trade dropped 2.8% from the September quarter and increased 16.5% in the comparable year ago period.

Real net national disposable income shed 1.6% in the December quarter from a quarter earlier and gained 4.8% from a year ago.

The statistics bureau said the largest negative contribution of expenditure on economic growth in seasonally adjusted terms were inventories that fell 1.6%.

However imports increased 1.7% and private business investment soared 0.2%.

In addition, the main contributors to the fall in GDP were manufacturing 0.5%, property and business services 0.3%, and wholesale trade 0.2%. The fall was offset by a positive contribution from agriculture, forestry and fishing rising 0.2%.

Australia Vehicle Sales Drop 22%

The Federal Chamber of Automotive Industries reported yesterday that Australian vehicle sales fell 22% in February after dropping 19% in January.

Sales declined across all segments from light cars to heavy trucks. Sales declined at Toyota by 31%, at Holden by 27%, and at Ford by 21%.

According to the report, Aston Martin sold four cars, Bentley and Lamborghini and Lotus sold two each and Ferrati and Maserati sold seven and 10 respectively.

Gainers & Losers

Murchison Metals led gainers in the ASX 200 index shares with a rise of 14.9% followed by increases in CSR Ltd. of 12%, in Sunland Corp. of 7.7%, in Fortescue Metals of 7.3%, and Riversdale Mining of 7.1%.

Commodity-related stocks increased as crude oil prices advanced 3.7% to $41.70 per barrel.

GPT Group led decliners in the ASX 200 index shares with a fall of 23.9% followed by losses in Goodman Group of 19.2%, in Hastings Diversified Utilities of 19%, in Macquarie Office of 18.2%, and Asciano Group of 17.5%.