The Australian economy is set to get a serious boost from mining exports this year but there are signs that other parts of the economy are picking up too.
The strong influence of exports in Australia's growth story should be apparent in March quarter growth figures due on Wednesday.
GDP is expected to have grown 0.8 per cent in the March quarter and 3.1 per cent on an annual basis when the Australian Bureau of Statistics releases the national accounts, according to an AAP survey of 15 economists.
That follows growth of 0.8 per cent in the December quarter and 2.8 per cent year-on-year.
The bulk of this growth is likely to come from foreign trade followed by consumer spending and residential construction, Commonwealth Bank senior economist Michael Workman said.
And strong exports will remain the predominant influence over gross domestic product (GDP) this year.
"Over the year, net exports are likely to be about two-thirds of all growth," he said.
Mr Workman said exports could strengthen further in 2015, with the addition of new LNG-related exports.
There was evidence the economy was rebalancing as the mining investment boom winds down, he said.
"It's quite clear that the pothole from mining investment will be met by higher consumer spending, much higher dwelling construction numbers and very, very strong exports," Mr Workman said.
"All that mining investment was always meant to produce much higher levels of export volumes and that's what is coming."
Mr Workman said unemployment looked to have already peaked and would start to decline after four or five months, making way for a rate hike in November.
JP Morgan economist Ben Jarman said the non-mining sector did appear to be picking up, but slowly.
"Things are gradually moving more towards stronger activity in the non-mining sector but the levels overall still look quite negative," he said.
"It's only really the net exports story that is lifting the numbers and keeping the aggregate numbers looking ok for GDP growth.
"But that contribution will fade, which is why it's important that the rest of the economy keeps stepping up through this year."
HSBC chief economist Paul Bloxham said growth had picked up at the turn of the year, but while rebalancing was underway, the momentum had slowed, partly because of the federal budget.
"Retail sales, building approvals and housing prices have steadied. This may reflect the impact of the May federal budget," he said.
"While the overall drag on growth from the budget is expected to be modest, cuts to social payments have been prominent and consumer sentiment has fallen."
Share
