Economy grows 0.5 per cent in December quarter 2019, but growth still below long run average

Despite economists forecasting a decline, the Australian economy grew 0.5 per cent in seasonally adjusted chain volume terms in the December quarter 2019, according to figures released by the ABS.

It takes the economic growth to 2.2 per cent through the year.

“The economy has continued to grow and picked up through the year, however the rate of growth remains below the long run average", ABS chief economist Bruce Hockman said.

Domestic demand remained subdued with 0.1 per cent growth in the December quarter.

A pick up in household discretionary spending and continued increases in the provision of government services was dampened by falls in dwelling and private business investment.

IFM economist Alex Joiner says the narrative is still unchanged.

"Private sector demand is extremely soft it's public spending, inventories and net exports keeping growth afloat, monetary easing hasn't been effective on the real economy as yet", Joiner tweeted.

Dwelling investment continued to fall, retracting a further 3.4 per cent, the sixth consecutive fall.

It was consistent with the decline in the construction industry value added which fell 2.3 per cent.

There was a large rise in ownership transfer costs due to the resurgence of the housing market. During the December quarter transfer costs were up 12.3 per cent to be 6.5 per cent up through the year.