The shifting shape of economic growth

The economy appears to be in a new phase where mining investment is no longer as big a drag on growth but net exports, consumption and dwellings investment are providing less support. The risk is that a fragile housing market results in consumption and dwellings investment weakening sharply. The big hope was always that while mining investment was falling, other business investment would fill the hole. This didn’t happen. The bars towards the left of the Chart show that mining investment went from adding an average of 1.3 percentage points (ppts) to the annual rate of GDP growth between 2010 and 2012 to taking off 0.7 ppts between 2013 and 2015, a swing of -2.0 ppts. Over the same periods, other business investment went from adding an average of 0.4 ppts to adding nothing. Instead, the hole was almost filled by a surge in the contribution from net exports, a boost from dwellings investment and still strong support from consumption.