A peek into Australian National Accounts for the September 2022 quarter

On 15 December 2022, the Australian Bureau of Statistics (ABS) released the statistics of Australian National Accounts and household balance sheets. In this article, we will cover these stats in further detail.

National investment

The ABS reported a decrease in national investment by AU$4.5 billion to AU$141.9 billion in the September quarter. General government investment declined by AU$10.0 billion to AU$21.1 billion, driven by a fall in gross fixed capital formation in state and local general government and national general government. On the other hand, non-financial corporations' investment grew AU$5.6 billion to AU$69.6 billion, driven by an increase in change in inventories in private non-financial corporations. It was slightly offset by a drop in gross fixed capital formation in private non-financial corporations and public non-financial corporations. Household investment was flat, remaining at AU$48.1 billion.

Financial investment

Australia was a net borrower of AU$8.1 billion from rest of world.

Households:

Households AU$52.7 billion net lending position was due to an AU$79.9 billion acquisition of financial assets, offset by AU$27.2 billion incurrence of liabilities.

Non-financial corporations

Non-financial corporations’ AU$50.9 billion net borrowing position was due to an AU$10.8 billion acquisition of financial assets offset by AU$61.7 billion incurrence of liabilities.

General government

General government’s AU$31.5 billion net borrowing position was due to an AU$13.2 billion disposal of financial assets and AU$18.2 billion incurrence of liabilities.

Demand for credit

Demand for credit was AU$117.5 billion in the September quarter. The breakdown of this figure is below:

• Other private non-financial corporations borrowed AU$68.5 billion
• Households borrowed AU$26.3 billion.
• General government borrowed AU$14.9 billion.

Households

Household wealth declined 1.9% to AU$14,201.1 billion at the end of the September 2022 quarter. This was the second consecutive quarter of decline in household wealth, driven by weakness in the housing market. Wealth per capita declined 2.2% to AU$545,532 per person. Non-financial assets owned by households decreased 2.8% while financial assets of households increased 0.8%.

Total household liabilities increased by 0.9%, driven by an AU$24.3 billion rise in housing loans and offset by an AU$1.5 billion fall in short term loans.

Private non-financial corporations:

Private non-financial corporations demand for credit during the September 2022 quarter was driven by AU$33.0 billion in loan borrowings, and an AU$41.4 billion issuance of equity.

Financial corporations:

Financial assets of Authorised deposit-taking institutions increased AU$241.1 billion during the quarter, reflecting robust derivative revaluations resulting from global market volatility, constant increases in lending, as well as increases in exchange settlement account balances. This resulted in:

• AU$35.4 billion growth in loans to households.
• AU$25.5 billion surge in loans to other private non-financial corporations.
• AU$24.9 billion rise in deposits with the central bank.

Financial liabilities of Authorised deposit-taking institutions grew AU$238.1 billion. The liabilities were driven by:

• AU$70.5 billion increase in deposits.
• AU$151.8 billion increase in derivatives due to global market volatility
• AU$10.4 billion increase in equity due to surges in the value of equity of listed banks.

The funding from deposits of Authorised deposit-taking institutions increased AU$56.6 billion, with a:

• AU$49.5 billion growth from household
• AU$15.8 billion rise from state and local general governments, offset by a AU$20.0 billion decline from private non-financial corporations.

Pension (superannuation) funds:

Total financial assets of pension (superannuation) funds improved 0.5%, with:

• AU$5.8 billion rise in bonds.
• AU$2.9 billion growth in one name paper.
• AU$1.7 billion surge in shares and other equity.

Government

General government (national, and state and local) were net borrowers of AU$31.5 billion, largely driven by AU$19.8 billion increase in loan liabilities.

Capital investment

Australia's net borrowing position declined AU$17.1 billion in December quarter, from a net lending position of AU$14.6 billion to a net borrowing position of AU$2.5 billion. It was driven by:

• AU$12.9 billion reduction in national net saving.
• AU$3.2 billion rise in gross fixed capital formation.
• AU$2.1 billion growth in change in inventories.

National capital investment improved to 22.8% as a proportion of GDP, also increasing 2.3% in current price seasonally adjusted terms.

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