GDP & Comms (Mar Qtr 2016) - June 2016

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ABS Economic Data Review
GDP & COMMUNICATIONS: MARCH QUARTER 2016
What GDP data informs about the telecommunications sector
 The March quarter saw stronger-than-expected GDP growth (up 1.1% q/q and 3.1% y/y), on the back of
downwardly revised annual growth in the December quarter 2015 (annual growth in calendar 2015 averaged
2.5% relative to its long-term average of 3.2% - though recent Treasury and RBA analysis suggests
potential growth may be lower going forward at around 2.8%-3.0%).
 While the economy still faces challenges in the task of rebalancing growth drivers, recent favourable
momentum in growth especially among key market-based services sectors suggests increased traction from
the RBA’s accommodative policy settings. But ultra-easy monetary policy continues to threaten asset market
and financial stability.
 With the global economy less supportive of growth in Australia, the significance of the latest national
accounts is that it continues to show the economy in a transitionary phase with growth driven by consumer
spending, dwelling investment and net exports. It is important to note that favourable headline GDP growth
in recent years largely reflects solid mining export performance and thus tends to mask underlying softness
in domestic demand. Along with surprisingly low inflation, this is a key factor vindicating the RBA’s easing
bias and its willingness to provide additional stimulus to support demand.
 On an annual basis, recent growth in the Information, Media and Telecoms (IMT) sector (in volume or real
terms) continues to outperform economy-wide growth, as technological developments drive consumer and
business demand for data across fixed and mobile networks. Solid volume growth also partly reflects
protracted telco price deflation.
Macro-economic overview
Despite the significant decline in mining investment and the slower than anticipated pick up in non-mining activity,
output of the Australian economy expanded at a commendable pace in early 2016. As has been the case for some
time, headline GDP growth in the March quarter (up 1.1% q/q and 3.1% y/y) was driven largely by net exports
which continues to mask softness in domestic demand. That the headline numbers were stronger than the detail
confirms that economic rebalancing remains patchy and subject to ongoing challenges.
The dividend from the multi-year expansion in mining investment capacity is the substantial rise in commodity
export volumes such as iron ore and coal (though prices have failed to keep pace given resultant over-supply and
tepid global demand conditions) at a time when the domestic economy remains soft. It is this softness in domestic
economic activity that has contributed to inflation undershooting the RBA target range. With the economy still
facing challenges, the RBA is expected to maintain its easing bias for some time. The outlook for low inflation thus
means that another rate cut in the second half of this year cannot be ruled out.
Data source: ABS; charts produced by economics@telstra.
-1%
0%
1%
2%
3%
4%
5%
Mar-2009 Mar-2010 Mar-2011 Mar-2012 Mar-2013 Mar-2014 Mar-2015 Mar-2016
Australian Gross Domestic Product (GDP)
(Real, Seasonally Adjusted)
Quarterly Growth
Annual Growth
Long-term average (y/y)
Natural disasters
in summer 2011
20+ years of uninterrupted
annual GDP growth.
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Mar-1996 Mar-2000 Mar-2004 Mar-2008 Mar-2012 Mar-2016
Domestic Demand & GDP - Annual Growth
Domestic Demand GDP
Persistently weak growth
in domestic demand since
2013 despite extensive
monetary stimulus.

Key components of GDP
The significance of the latest national accounts is that it continues to show the economy in a transitionary phase
with growth driven by net exports, consumer spending and dwelling investment. While headline growth appears
favourable, the bulk of domestic economic activity (outside housing) remains sluggish. Growth in the domestic
economy was meagre at 0.1% q/q and up only 0.9% y/y. Sustained sluggish growth in demand is due to
headwinds such as soft labour market conditions, weak wage growth, subdued consumer confidence and the
sharp decline in mining investment.
 Consumer spending (up 0.7% q/q and 3.0% y/y, contributing 0.4% points to quarterly growth) was
favourable in the March quarter with the growth contribution in line with the average observed over recent
years. Spending continues to be more broadly in line with income growth as subdued confidence and an
elevated household savings ratio supports more sustainable growth outcomes going forward. The outlook
for consumer spending remains cautious reflecting headwinds from weak wage growth and limited gains in
full-time employment, as well as moderation in house prices dampening the ‘wealth effect’.
 The confluence of low mortgage rates, improved housing affordability and favourable demographics
continues to underpin resilience in dwelling investment (up 1.4% q/q and 7.0% y/y, contributing 0.1%
point to quarterly growth). After an extended period of solid growth, housing market activity is now
moderating especially along the nation’s east coast. But the pipeline of construction activity should ensure
housing provides a solid contribution to economic growth in the coming year.
1.1%
0.4%
0.2%
0.1%
0.0%
0.6%
1.3%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
Net exports Consumer
spending
Public
demand
Housing Change in
Inventories
Business
capex
GDP (E)
Q1 2016: Main Contributors to Quarterly GDP Growth
(Real, Seasonally Adjusted, % points)
NOTE:Main GDP (Expenditure)
components do not sum to total GDP (E)
due to statistical discrepancy and exclusion
of dwelling ownership transfer costs.
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Mar Qtr 2013 Sept Qtr 2013 Mar Qtr 2014 Sept Qtr 2014 Mar Qtr 2015 Sept Qtr 2015 Mar Qtr 2016
Points
Key Drivers of Quarterly GDP Growth
(Percentage point contribution)
Net exports Private demand
Public demand GDP
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2.2%
2.4%
Mar Qtr 2011 Mar Qtr 2012 Mar Qtr 2013 Mar Qtr 2014 Mar Qtr 2015 Mar Qtr 2016
Points
Consumer Spending Contribution
to Annual GDP Growth
Consumerspending
contributed 1.7% points to
annualGDP growth (3.1%)
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Mar-2000 Mar-2002 Mar-2004 Mar-2006 Mar-2008 Mar-2010 Mar-2012 Mar-2014 Mar-2016
Australia's Growth Momentum Improves
Households Remain Key Growth Driver. But Domestic Demand Subdued.
Consumer spending (annual %)
GDP (annual %)
Domestic demand (annual %)
(All data are real, seasonallyadjusted)

 Business capex (down 4.2% q/q and 13.0% y/y, detracting 0.6% points from quarterly growth)
continues to decline on an annual basis as the mining investment cycle transforms into a production/export
phase. While the sharp decline in mining investment with limited offset coming from key non-mining
sectors is expected to remain a drag on growth in 2016, the ramp up in production and commodity exports
should continue to contribute to growth outcomes over this period (see next dot point).
 Net exports contributed a solid 1.1% points to quarterly GDP growth as commodity export volumes
increased sharply and import volumes fell. Exports (up 4.4% q/q and 6.6% y/y) are forecast to continue
to grow at a resilient pace over coming years as additional mining productive capacity comes on-stream.
The composition of net exports in the March quarter saw gains in iron ore as well as non-monetary gold.
Encouragingly, services exports such as tourism and education continue to strengthen boosted by the
lower exchange rate and favourable demand conditions as the Asian middle-class expands.
-50%
-30%
-10%
10%
30%
50%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Dwelling Investment & Non-Dwelling Construction
Non-Dwelling Construction - Annual Growth
Dwelling Investment - Annual growth
-20%
-10%
0%
10%
20%
Housing Construction v. Alterations & Additions
(Annual Growth)
Housing construction
Alterations & additions
Annual house price growth
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Points
Business Investment Contribution
Businesscapexdetracted
1.9% points from annual
GDP growth (3.1%)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
$ million
Business Capital Expenditure
Plant & Equipment
Engineering Infrastructure
Non-Dwelling Construction
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Points
Net Exports Contribution
Net exports contributed
1.9% point to annualGDP
growth (3.1%)
-10,000
-7,500
-5,000
-2,500
-
2,500
5,000
7,500
10,000
12,500
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
AUD$m
External Sector
Ann. chg in net exports (levels, $m) (RHS) Exports (ann %) (LHS)
Imports (ann %) (LHS)

 The external sector more than offset sluggish domestic demand (up only 0.1% q/q and 0.9% y/y) with
softness in private demand (especially business investment) overlayed by a marginal contribution to
growth from public spending despite imperatives around fiscal consolidation.
The IMT sector v. economy
While recent growth in the IMT sector (in volume or real terms) has outperformed growth in the overall economy,
this partly reflects extensive and protracted price deflation.
 With quarterly growth averaging 2.3% in 2015, some moderation was expected in early 2016. The March
quarter saw IMT sector output expand at a much slower rate (up only 0.2%, down from a revised 2.7%
increase in the December quarter) pushing annual growth lower to 5.5%. Annual growth has recently
stabilised at a level well above its 10-year average of 3.7%.
 With yearly growth of 5.5% cf. 3.1% for GDP, the IMT sector continues to out-perform the economy overall
evidenced by its higher share of real GDP (currently at 3.01% cf. a recent 10-year average of 2.84%)
remaining on a modest uptrend since March 2014.
 Technological developments continue to fuel household and business demand for data across both
fixed and mobile networks. The need for fast and reliable Internet connections with greater download
capabilities should ensure that industry investment in network capacity remains a priority. This should sustain
output growth going forward.
 The increased use of ICT services by the business sector in an effort to compete more effectively both
domestically and offshore also driving strong recent performance in the IMT sector.
1.8%
1.5%
0.5% 0.7% 0.7%
1.4%
1.1% 1.1%
0.9%
2.1%
1.1%
1.7%
2.0%
0.9%
0.7%
1.5%
0.8%
1.9%
3.0%
2.7%
2.6%
2.3% 2.3%
2.1%
2.7%
2.9%
3.1%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Mar Qtr 2014 Sept Qtr 2014 Mar Qtr 2015 Sept Qtr 2015 Mar Qtr 2016
(Points)
Domestic Demand & Net Exports
Domestic demand Net exports Real GDP growth
% Point Cont. to Annual GDP Growth
Since 2013,net exports (due to mining) has been
a major contributor to GDP growth. But growth in
domestic demand softdespite low interest rates.
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Australia's Growth Momentum Improves
Exports Key Growth Driver with Domestic Demand Subdued
Net exports (% pt cont. to qtrly GDP)
GDP (annual % chg)
Domestic demand (annual % chg)
(All data are real, seasonallyadjusted)
96
98
100
102
104
106
108
110
112
114
116
118
120
122
124
126
Mar-2010 Mar-2011 Mar-2012 Mar-2013 Mar-2014 Mar-2015 Mar-2016
Real GDP: IMT Sector & Australian Economy
(Indexed Output Growth: Mar. Qtr 2010=100)
Real GDP IMT Output
IMT sector output growth remains on firm
uptrend after extended period of sluggish
growth. Consistent with broader
improvement in services sector activity
which tends to have high comms intensity.
Mar-2016, 5.5%
-2%
0%
2%
4%
6%
8%
10%
12%
Industry GVA* - Info, Media & Telecoms v. GDP
(Annual Growth)
Real GDP Real IMT Output
* GVA is 'Gross Value Added' = Output

 The IMT/GDP growth multiple (in annual terms) fell from 3.25x in the December quarter to 1.75x in the first
quarter of 2016. The current (deteriorated) growth multiple remains above its recent 20-year average of 1.4x.
Consumer spending on communications including ‘share of wallet’ analysis
High levels of household indebtedness, limited gains in full-time employment and weak wage growth are limiting
overall spending capacity and making it difficult for households to increase their spending on telco products and
services.
 Aggregate consumer spending proved surprisingly resilient during the March quarter (up 0.7% q/q and
3.0% y/y in real terms), suggesting that lower interest rates and a modest housing wealth effect were
effective in supporting spending. This is despite constrained full-time employment growth and weak wage
growth limiting spending propensity and capacity.
 Evidence of the wealth effect is also reflected in resilient household income growth which has enabled
gains in spending and higher savings with the household savings ratio rising to 8.1% in the March
quarter (cf. 7.5% in the December quarter and a post-GFC average of 9.8%).
 In seasonally adjusted terms (March quarter is typically a weak quarter) nominal consumer spending on
communications fell by 0.2% during the first three months of 2016, with annual growth weak at -1.1%
largely due to falling prices. Since the beginning of 2014, annual telephony price deflation has averaged
negative 3.4% compared with an average 1.0% annual growth in nominal communications spending. This
compares with aggregate nominal consumer spending which increased by 0.6% in the March quarter,
to be up 4.2% across the year (down from a peak of 9.5% at December 2007).
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
-2.5x
-2.0x
-1.5x
-1.0x
-0.5x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
5.5x
Mar.2006 Jun.2007 Sep.2008 Dec.2009 Mar.2011 Jun.2012 Sep.2013 Dec.2014 Mar.2016
Points
IMT/GDP Growth Multiple
& Deviation from GDP Growth*
(Real, Annual Growth)
Deviation from GDP A% (RHS)
Comms/GDP multiple (LHS)
Comms/GDP multiple, 20-yr avg (LHS) Positive territory:
IMT sectorout-
performing economy in
annual growth terms
Negative territory:
IMT sector under-
performing economy in
annual growth terms
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
Mar-1989 Mar-1992 Mar-1995 Mar-1998 Mar-2001 Mar-2004 Mar-2007 Mar-2010 Mar-2013 Mar-2016
Info, Media & Telecoms Sector Share of GDP
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Consumer Spending, Household Income and Savings
(Annual % Change)
Savings (% HDI) Real Consumer Spending Household Disposable Income
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
Real Consumer Spending & GDP
Consumer spending (Quarterly growth)
Consumer spending (Annual growth)
GDP (Annual growth)

 Recent trends in household disposable income (HDI) growth reflects resilient (albeit softer) employment
outcomes and subdued wage growth. In the March quarter, HDI growth was up 1.2% (cf. 0.2% in the
previous quarter), pushing annual growth higher to 3.8% - though remains below its recent 5-year average
of 4.6%. Low interest rates remain a dominant factor boosting (post-mortgage) discretionary incomes.
 Annual growth in consumer spending on communications continued to fall (down 1.1% nominal) and not
keeping pace with household incomes (up 3.8%), with consequent ongoing falls in the communications
‘share of wallet’ (now 1.80% compared with a recent cycle peak of 2.0% at June 2013). Most other
expenditure categories grew faster than communications in nominal terms. This mainly reflects price
deflation in the telco sector.
2.0%
2.1%
2.2%
2.3%
2.4%
2.5%
2.6%
2.7%
2.8%
2.9%
3.0%
-2%
0%
2%
4%
6%
8%
10%
12%
Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Consumer Spending on Communications
Comms share of total spending (RHS)
Total consumer spending y/y% (LHS)
Consumer spending on comms y/y% (LHS)
All data are in nominal,
seasonally adjusted terms.
40%
41%
42%
43%
44%
45%
46%
47%
48%
49%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
Consumer Spending in Real & Nominal Terms
Nominal comms share of total spending (LHS) Real comms share of total spending (LHS)
Real essentials spend % total spend (RHS) Nominal essentials spend % total spend (RHS)
Essentials spend = food, rent, utilities,
transport, health & education
Telco price disinflation limiting
gains in nominal comms spending
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Mar-1996 Sep-1998 Mar-2001 Sep-2003 Mar-2006 Sep-2008 Mar-2011 Sep-2013 Mar-2016
Household Disposable Income
Quarterly growth
Annual growth
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
Household Disposable Income & Employment
(Annual Growth)
Wage growth
Employment growth
HDI
Mar.2016, 1.802%
0.50%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
Mar.1988 Sep.1991 Mar.1995 Sep.1998 Mar.2002 Sep.2005 Mar.2009 Sep.2012 Mar.2016
Consumer Spending on Communications
(Data are in nominal terms, seasonally adjusted)
Share of total spending
Share of HDI
-0.6%
-0.5%
-0.4%
-0.3%
-0.2%
-0.1%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
Communications "Share-of-Wallet":
Deviation from 20-Year Average
(Data are in nominal terms, seasonally adjusted)
% point deviation
Recent downtrend in comms 'share-of- wallet' partly
reflects the cyclical impact of the growth slowdown;
resilient HDI growth; telco price deflation; and the
structural impact of telco productmarket saturation.

 Communications ‘share of wallet’ over the past 3 years has averaged around 1.91%. With annual
growth in nominal communications spend and HDI averaging 2.0% and 3.9%, respectively over this period,
communications continues to lose ‘share of wallet’ in a period where HDI growth remains resilient.
 In real terms (excluding price effects), annual growth in communications spend remains favourable
increasing by 5.7% (up from a 5.4% annual pace at December 2015) and outperforming growth in total
spending (up 3.0%). Again, telco price deflation is likely flattering spending growth in real terms.
 Going forward, slack in the labour market will continue to constrain wage income growth in turn likely
limiting further gains in spending at a macro level (unless households draw down on their savings to partly
fund spending). This is despite extensive monetary stimulus currently flowing through the economy.
Telephony price deflation
Given the current environment of intense price competition in the telco market, the focus on optimising network
performance becomes all the more important in the context of product/service differentiation. Historic 1%-2% telco
price inflation fell sharply to an average -5.8% in H2 2015 and Q1 2016, with some analysts expecting telco prices
to continue to fall by around 2%-3% in the coming year.
 According to the ABS, consumer prices for telecommunications continued to decline in the March
quarter (down 1.7% q/q and 6.7% y/y), with telephony prices having fallen by a cumulative 11.6% since
mid-2014. Intense price competition reflects, inter alia, limited scope for organic market growth and
customer focus on ‘value for money’. Deflation risks likely to persist in our sector for some time but
sustainability remains a key issue.
 Annual price deflation in the telco sector remains well below annual overall price inflation (as
measured by the CPI) which increased by 1.3% over the same 12-month period (down from 1.7% at
December 2015 and 2.9% at March 2014). Relative to its long-term average, telco price inflation remains
very low.
-0.15%
-0.10%
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
Gain or Loss in Share of HDI
Mar. 2015 to Mar. 2016
Communications, -1.1%
-2%
0%
2%
4%
6%
8%
Growth in Nominal Consumer Spend Categories
Growth over last 12 months to Mar. 2016
Totalnominal spending
HDI
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Annual Price Inflation - Telecommunications v. CPI
All Groups CPI
Telecommunications
Q1 2016 Overall CPI: +1.3% y/y
Q1 2016 Telco inflation: -6.7% y/y
-7.00%
-6.50%
-6.00%
-5.50%
-5.00%
-4.50%
-4.00%
-3.50%
-3.00%
-2.50%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
% Points
CPI Telco Inflation - Annual % Change
(Deviation from long-term (20-year) average)
Telco Overall CPI
CPI 20-yr avg. y/y% = +2.5%
Telco CPI 20-yr avg. y/y% = -0.1%

 From a macro perspective, the latest CPI data for the March quarter (down 0.2% q/q but up 1.3% y/y)
reaffirmed the absence of inflationary pressures in the Australian economy allowing the RBA to maintain
(and potentially expand) monetary stimulus. While domestic economic growth appears resilient, low
inflation allows the RBA scope to provide additional stimulus if the balance of risks to growth deteriorates.
 Subdued trends in telco price inflation contrasts sharply with other selected goods and services
which have seen sharp price rises over recent years due to a combination of structural and cyclical factors.
 On a real (inflation-adjusted) basis, telecommunications consumer price inflation remains low with prices
falling by 15.6% over the past 5 years implying enhanced consumer welfare.
IMT sector employment and wage growth
Generally soft demand conditions are constraining IMT and economy-wide employment growth especially in full-
time positions. This is a key factor limiting wage growth and keeping wage inflation at a low level by historical
comparison.
 Employment in the IMT services sector fell by 13,500 persons in the March quarter to 209,900 persons
(down 6.0% q/q and 2.6% y/y). The March quarter represents a level of IMT sector employment slightly
above it recent 3-year average. The IMT sector was one of eight sectors to report declining employment
across the year to March.
 Relatively stronger growth in IMT sector output (up 0.2% q/q) than labour input (down 6.0% q/q) has
resulted in a sharp increase in output per worker in the March quarter (up 6.7%). This outcome contrasts
with weaker labour productivity across the macro economy which has experienced resilient employment
gains.
 Growth in output per worker in the IMT sector (up 8.2% across the year to March) continues to out-
perform economy-wide productivity (up 1.1% across the year). The recent 3-year average labour
0%
1%
2%
3%
4%
5%
6%
Australian GDP & CPI Inflation
(Year-on-Year Growth)
Real GDP Headline CPI Inflation RBA Underlying CPI Inflation
-1.75%
-1.50%
-1.25%
-1.00%
-0.75%
-0.50%
-0.25%
0.00%
0.25%
0.50%
Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16
% Points
CPI Inflation - Annual Growth
(Deviation from long-term average)
Underlying CPI
Headline CPI Inflation
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
Mar.1998 Jun.2000 Sep.2002 Dec.2004 Mar.2007 Jun.2009 Sep.2011 Dec.2013 Mar.2016
Employment: Annual % Change
(Information, Media & Telecoms Sector v. Total Industry)
IMT sector (LHS)
Economy-wide (RHS)
-40 -30 -20 -10 0 10 20 30 40 50 60 70
Retail
Health care
Transport, postal & warehousing
Admin & support
Prof. scientific & tech.
Construction
Finance & insurance
Public admin. & safety
Rental, hiring & real estate
Mining
Agriculture
Utilities
Arts & recreation
Education
Information, media & telecoms
Accommodation
Manufacturing
Other services
Wholesale
Employment Growth by Sector
(Year to February 2016, '000's - Mid-point of Quarter)
Aggregate employment
increase = 234,700
Sectors withgrowing
employment
Sectors withcyclically
& structurallydeclining
employment

productivity performance in the IMT sector (7.7% in annual terms) has comfortably outpaced that for the
economy overall (1.1%).
 The pace of annual wage inflation across all industries continues to slow including in the IMT sector
consistent with low price inflation, constrained full-time employment growth and sluggish growth in
domestic demand. Across the year to the March quarter, IMT sector wages increased by 2.2% (down
slightly from the 2.3% annual rate in the December quarter) compared with a relatively softer industry-wide
increase of 2.1% (the same rate as in the previous quarter).
 This outcome confirms underlying slack in the labour market (i.e., an elevated full-time unemployment
rate) which is underscoring the low inflation environment in Australia as well as the RBA’s willingness to
provide additional monetary stimulus in order to support demand.
*****************************************************************************************************************************
15
20
25
30
35
40
45
50
55
60
65
Mar.1998 Mar.2000 Mar.2002 Mar.2004 Mar.2006 Mar.2008 Mar.2010 Mar.2012 Mar.2014 Mar.2016
$'000's per employee
Partial Labour Productivity
(RealOutput per Employee)
IMT sector
Economy-wide
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
Mar.2006 Mar.2008 Mar.2010 Mar.2012 Mar.2014 Mar.2016
IMT Sector Annual 'GDP' Growth Composition
(GDP proxied by Real Industry Gross Value-Added)
Employment
Productivity
IMT output growth
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
IMT Sector Wage Inflation
(Data in Original terms)
IMT quarterly wage growth
IMT annual wage growth
Economy-wide annual wage growth
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Wage Price Index by Selected Industry
(Original Data, Annual Growth to March 2016)
Economy-wide wage growth Headling CPI inflation
RBA Core CPI inflation Recent 5-yr avg. wage growth

Key Economic Statistics
All (non-TLS) data are ABS sourced and seasonally adjusted. * Industry wage data are in original terms.
Data in this table are ABS sourced and seasonally adjusted.
National Accounts Q1 2016 Q4 2015 q/q% Q1 2015 y/y%
Real GDP 2013-14$m 420,023 415,605 1.1% 407,316 3.1%
Consumer Spending 2013-14$m 233,040 231,494 0.7% 226,203 3.0%
Housing Investment 2013-14$m 22,635 22,316 1.4% 21,151 7.0%
Plant & Equipment Investment 2013-14$m 16,943 17,266 -1.9% 18,354 -7.7%
Non-Dwelling Investment 2013-14$m 25,034 27,115 -7.7% 31,141 -19.6%
Public Spending 2013-14$m 91,923 91,161 0.8% 89,185 3.1%
Domestic demand 2013-14$m 405,844 405,325 0.1% 402,331 0.9%
IMT Output 2013-14$m 12,653 12,627 0.2% 11,999 5.5%
Nominal GDP $m 412,425 410,447 0.5% 404,137 2.1%
Communications spending Q1 2016 Q4 2015 q/q% Q1 2015 y/y%
Real consumer 2013-14$m 5,840 5,768 1.2% 5,527 5.7%
Nominal consumer $m 5,129 5,138 -0.2% 5,185 -1.1%
Telstra consumer $m 2,889 3,054 -5.4% 2,982 -3.1%
Household disposable income $m 284,641 281,323 1.2% 274,111 3.8%
'share-of-wallet' 1.80% 1.83% - 1.89% -
Prices & Wages Q1 2016 Q4 2015 q/q% Q1 2015 y/y%
Overall Consumer Price Index 2011-12=100 108.2 108.4 -0.2% 106.8 1.3%
Telephony CPI Index 2011-12=100 92.0 93.6 -1.7% 98.6 -6.7%
Overall Wage Price Index* 2008-09=100 123.2 122.7 0.4% 120.7 2.1%
IMT Wage Price Index* 2008-09=100 120.8 120.7 0.1% 118.2 2.2%
Employment Q1 2016 Q4 2015 q/q% Q1 2015 y/y%
Economy-wide 000's 11,879.8 11,883.0 0.0% 11,642.6 2.0%
IMT sector 000's 209.9 223.4 -6.0% 215.4 -2.6%
CONSUMER SPENDING Nominal growth Real growth
Mar. Quarter 2016 Qtrly % Annual % 3-yr CAGR 10-yr CAGR Share of HDI Qtrly % Annual % 3-yr CAGR 10-yr CAGR
Food 0.7% 3.9% 3.5% 4.9% 8.25% 0.8% 4.8% 2.4% 2.8%
Tobacco -1.4% -0.3% 2.6% 4.3% 1.42% -2.8% -11.3% -8.7% -4.6%
Alcohol 1.1% 2.4% 4.5% 4.3% 1.43% 0.8% 0.7% 2.2% 1.7%
Clothing & Footwear 1.6% 6.9% 4.9% 3.5% 2.70% 1.4% 6.8% 5.1% 4.0%
Rent 0.7% 3.8% 4.9% 7.0% 18.03% 0.6% 2.3% 2.3% 2.6%
Electricity & Gas 1.6% 6.1% 4.4% 8.4% 2.15% 1.8% 7.4% 3.6% 1.3%
Furniture etc 1.2% 5.5% 5.0% 3.9% 3.57% 0.4% 2.5% 4.1% 3.7%
Health 0.1% 6.4% 5.5% 7.0% 5.39% 0.7% 4.0% 3.4% 4.8%
Purchase of Vehicles -0.1% -0.6% 2.0% 0.8% 1.68% -0.4% -1.7% 2.3% 3.0%
Operation of Vehicles -3.1% 3.1% -0.9% 3.1% 3.96% 0.5% 4.4% 1.5% 1.8%
Transport Services 1.7% 2.6% 3.3% 6.1% 2.64% 2.5% 1.5% -1.7% 3.7%
Communications -0.2% -1.1% 0.6% 2.3% 1.80% 1.2% 5.7% 8.6% 5.0%
Recreation & Culture 0.3% 6.0% 5.0% 4.0% 8.42% 0.0% 4.4% 3.6% 3.1%
Education Services -0.3% 4.9% 6.4% 8.3% 3.93% 0.4% 1.5% 1.6% 2.9%
Hotels & Restaurants 0.5% 1.4% 5.0% 4.3% 5.57% 0.1% -0.7% 3.0% 2.1%
Financial Services 1.9% 6.8% 8.1% 6.3% 7.82% 1.6% 4.8% 6.3% 2.9%
Other 1.1% 4.2% 4.4% 5.2% 5.45% 0.7% 3.0% 2.3% 3.3%
Total spending* 0.6% 4.2% 4.6% 5.3% 84.21% 0.7% 3.0% 2.9% 2.8%
Essentials** 0.6% 4.3% 4.7% 6.7% 40.39% 0.8% 3.2% 2.2% 2.9%
Discretionary 0.5% 4.2% 4.4% 4.2% 43.83% 0.5% 2.9% 3.5% 2.8%
H/hold Disp. Income (HDI) 1.2% 3.8% 3.7% 6.0% - - - - -
Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015
H/hold Savings Ratio 8.1% 7.5% 8.5% 9.0% 8.6%

GDP & Comms (Mar Qtr 2016) - June 2016

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