The economy picked up speed in the June quarter, this morning’s national accounts figures from the Australian Bureau of Statistics show, with the economy growing 0.8% compared to just 0.3% in the previous quarter, seasonally adjusted. Growth across 2016-17, at 1.9% — only barely above the March quarter result of 1.7% — remains weak due to the strong June 2016 quarter (also 0.8%) dropping out.

The June quarter result came despite a 6% fall in terms of trade from declining commodity prices, and was driven by stronger household and government consumption — at 0.7% and 1.2% respectively. However, employee compensation growth fell from 1% to 0.7% despite greater optimism among policymakers that Australia’s long period of wage stagnation is nearly over. Households are continuing to dig into their savings; as the ABS noted, “The household saving ratio is 4.6% in seasonally adjusted terms in the June quarter 2017, down from 5.3% in the March quarter 2017. Over the past five quarters gross disposable income has grown at an average of 0.5%. This is consistently lower than the growth being observed in [household consumption final expenditure].”

Strongly performing sectors were agriculture, which has continued its strong run over the last three quarters, continuing housing investment growth in NSW and Victoria and household consumption of food, as well as growing business investment despite a decline in company profits driven by falling commodities prices.