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Australian economic growth slows amid manufacturing decline

Updated 12 times since CLSTR started tracking revisions of this situation.

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2026-09-30 17:54 UTC → 2026-09-30 23:59 UTC · added ~~removed~~

The Australian economic landscape continues to show a divergence between essential and discretionary spending, alongside signs of slowing growth. While essential retailers like Woolworths have remained resilient, discretionary sectors such as Domino’s Pizza Enterprises have struggled. Recent National Accounts from the Australian Bureau of Statistics show the economy expanded by 0.4% in the June quarter, exceeding the 0.3% consensus forecast. Annual growth slowed to 2.1%, surpassing the Reserve Bank of Australia’s projection of 1.9%. Treasurer Jim Chalmers characterized the figures as a “robust result” despite global uncertainties, noting contributions from housing investment and the private economy. ~~However, household consumption remained subdued, increasing by only 0.4%, with growth largely bolstered by a 10.3% surge in electric and hybrid vehicle sales.~~ By September, indicators suggested a potential slowdown, with the S&P Global Flash Composite PMI falling to 50.8, driven by a sharp contraction in manufacturing. Inflation rose to 4% for the year ending in August, up from 3.5%, driven largely by a 5.7% increase in housing costs and a 5.6% rise in transport costs. Fuel prices saw a monthly surge of 14.8% due to higher global oil prices and the restoration of federal fuel excise ~~relief.~~ relief, with officials noting that the Middle East conflict has contributed to these elevated costs. While the headline figure met expectations, the annual trimmed mean remained steady at 3.6%, and the monthly trimmed mean rose by only 0.2%, lower than the expected 0.3%. Following the RBA’s decision to raise the cash rate to 4.6%, a 15-year high, Australian shares responded positively to the softer underlying inflation. However, Master Builders Australia warned that high interest rates and construction costs are dampening investment, noting a 6.1% drop in new home building approvals for August. Recent data confirms that total household spending remained flat in August, with a 0.3% decline when excluding the distortion of an 8.1% spike in fuel costs.

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