- Westpac IQ
- Economics
- What weakness in the supply side? 2023-24 Annual national accounts
What weakness in the supply side? 2023-24 Annual national accounts
By Pat Bustamante
Senior Economist, Westpac
10:10 October 30 2024
Share this article
The economy grew by 1.4% in year average terms over 2023-24, broadly in line with the initial estimate from the quarterly national accounts (+1.5%). Economic growth was revised higher (+0.3ppts) to 3.4% in 2022-23.
What weakness in the supply side? 2023-24 Annual national accounts
One of the main takeaways from the Annual National Accounts seems to be that the supply side has largely healed, pointing to easing future cost pressures. While employment growth has been solid and the labour market remains tighter than average, this largely reflects the growing working age population and the unprecedented expansion in public demand.
As public demand transitions to a new record share of the economy, measured productivity growth will be soft. There is no doubt about it. We estimate that by the end of 2024-25, measured productivity will be around 2.1ppts lower because of this expansion in public demand. But as our scenario showed this reflects “base effects” as a larger share of workers are engaged in the non-market sector. It does not reflect underlying problems with our supply side. The Annuals clearly show the adverse supply side impacts resulting from the pandemic have largely faded.
As this expansion plateaus, the impact on ongoing or trend productivity growth, which is what is important for ongoing inflationary pressures, will be small (we estimate it will be around 0.1ppts per year).
Should policy makers see the unprecedented expansion in public demand as a cyclical upswing as opposed to structural change, they could conclude that the aggregate supply curve has “shifted to the left”. If anything, the Annuals showed that the supply curve “has shifted to the right”, but it has been masked by this transition. Given the greater than usual uncertainty, the RBA’s wait and see approach will likely keep the RBA Board on the sidelines to early next year.
Click on the link above for full report.
Related articles
NZ GDP review, September quarter 2024
December 19 2024
•
3 mins
3 mins
First Impressions: NZ GDP, September quarter 2024
December 19 2024
•
3 mins
3 mins
NZ GDP preview, September quarter 2024
December 12 2024
•
2 mins
2 mins
20
{"topicSelector":[{"tagId":"westpaciq:topics/aud","name":"aud","description":"","title":"AUD","url":"/topic.aud"},{"tagId":"westpaciq:topics/australia","name":"australia","description":"","title":"Australia","url":"/topic.australia"},{"tagId":"westpaciq:topics/interestrates","name":"interestrates","description":"","title":"Interest rates","url":"/topic.interestrates"},{"tagId":"westpaciq:topics/usd","name":"usd","description":"","title":"USD","url":"/topic.usd"},{"tagId":"westpaciq:topics/nzd","name":"nzd","description":"","title":"NZD","url":"/topic.nzd"},{"tagId":"westpaciq:topics/newzealand","name":"newzealand","description":"","title":"New Zealand","url":"/topic.newzealand"},{"tagId":"westpaciq:topics/rates","name":"rates","description":"","title":"Rates","url":"/topic.rates"},{"tagId":"westpaciq:topics/rba","name":"rba","description":"","title":"RBA","url":"/topic.rba"},{"tagId":"westpaciq:topics/inflation","name":"inflation","description":"","title":"Inflation","url":"/topic.inflation"},{"tagId":"westpaciq:topics/credit","name":"credit","description":"","title":"Credit","url":"/topic.credit"},{"tagId":"westpaciq:topics/commodities","name":"commodities","description":"","title":"Commodities","url":"/topic.commodities"},{"tagId":"westpaciq:topics/acgb","name":"acgb","description":"","title":"ACGB","url":"/topic.acgb"},{"tagId":"westpaciq:topics/us","name":"us","description":"","title":"US","url":"/topic.us"},{"tagId":"westpaciq:topics/forecasts","name":"forecasts","description":"","title":"Forecasts","url":"/topic.forecasts"},{"tagId":"westpaciq:topics/ustreasury","name":"ustreasury","description":"","title":"US Treasury UST","url":"/topic.ustreasury"},{"tagId":"westpaciq:topics/europe","name":"europe","description":"","title":"Europe","url":"/topic.europe"},{"tagId":"westpaciq:topics/jpy","name":"jpy","title":"JPY","url":"/topic.jpy"},{"tagId":"westpaciq:topics/abs","name":"abs","description":"","title":"ABS","url":"/topic.abs"},{"tagId":"westpaciq:topics/rbnz","name":"rbnz","description":"","title":"RBNZ","url":"/topic.rbnz"},{"tagId":"westpaciq:topics/eur","name":"eur","description":"","title":"EUR","url":"/topic.eur"},{"tagId":"westpaciq:topics/fx","name":"fx","description":"","title":"FX","url":"/topic.fx"},{"tagId":"westpaciq:topics/fomc","name":"fomc","description":"","title":"Federal Reserve FOMC","url":"/topic.fomc"},{"tagId":"westpaciq:topics/yieldcurve","name":"yieldcurve","description":"","title":"Yield curve","url":"/topic.yieldcurve"},{"tagId":"westpaciq:topics/ois","name":"ois","description":"","title":"OIS","url":"/topic.ois"},{"tagId":"westpaciq:topics/uk","name":"uk","description":"","title":"UK","url":"/topic.uk"},{"tagId":"westpaciq:topics/macro","name":"macro","description":"","title":"Macro","url":"/topic.macro"},{"tagId":"westpaciq:topics/gbp","name":"gbp","description":"","title":"GBP","url":"/topic.gbp"},{"tagId":"westpaciq:topics/basis","name":"basis","description":"","title":"Basis","url":"/topic.basis"},{"tagId":"westpaciq:topics/whatspricedin","name":"whatspricedin","description":"","title":"What\u0027s priced in","url":"/topic.whatspricedin"},{"tagId":"westpaciq:topics/nz","name":"nz","description":"","title":"NZ","url":"/topic.nz"},{"tagId":"westpaciq:topics/china","name":"china","description":"","title":"China","url":"/topic.china"},{"tagId":"westpaciq:topics/semigovernment","name":"semigovernment","description":"","title":"Semi government","url":"/topic.semigovernment"},{"tagId":"westpaciq:topics/bonds","name":"bonds","description":"","title":"Bonds","url":"/topic.bonds"},{"tagId":"westpaciq:topics/housing","name":"housing","description":"","title":"Housing","url":"/topic.housing"},{"tagId":"westpaciq:topics/podcast","name":"podcast","description":"","title":"Podcast","url":"/topic.podcast"},{"tagId":"westpaciq:topics/ecb","name":"ecb","description":"","title":"European central bank ECB","url":"/topic.ecb"},{"tagId":"westpaciq:topics/consumer","name":"consumer","description":"","title":"Consumer","url":"/topic.consumer"},{"tagId":"westpaciq:topics/crosscurrencyxccy","name":"crosscurrencyxccy","description":"","title":"Cross currency XCCY","url":"/topic.crosscurrencyxccy"},{"tagId":"westpaciq:topics/retail","name":"retail","description":"","title":"Retail","url":"/topic.retail"},{"tagId":"westpaciq:topics/bbsw","name":"bbsw","description":"","title":"BBSW","url":"/topic.bbsw"},{"tagId":"westpaciq:topics/crossmarket","name":"crossmarket","description":"","title":"Cross market","url":"/topic.crossmarket"},{"tagId":"westpaciq:topics/employment","name":"employment","description":"","title":"Employment","url":"/topic.employment"},{"tagId":"westpaciq:topics/currencies","name":"currencies","description":"","title":"Currencies","url":"/topic.currencies"},{"tagId":"westpaciq:topics/ironore","name":"ironore","description":"","title":"Iron ore","url":"/topic.ironore"},{"tagId":"westpaciq:topics/morningreport","name":"morningreport","description":"","title":"Morning Report","url":"/topic.morningreport"},{"tagId":"westpaciq:topics/gdp","name":"gdp","description":"","title":"GDP","url":"/topic.gdp"},{"tagId":"westpaciq:topics/westpacwrap","name":"westpacwrap","description":"","title":"Westpac Wrap","url":"/topic.westpacwrap"},{"tagId":"westpaciq:topics/consumersentiment","name":"consumersentiment","description":"","title":"Consumer Sentiment","url":"/topic.consumersentiment"},{"tagId":"westpaciq:topics/labour","name":"labour","description":"","title":"Labour","url":"/topic.labour"},{"tagId":"westpaciq:topics/chartpacks","name":"chartpacks","description":"","title":"Chart packs","url":"/topic.chartpacks"},{"tagId":"westpaciq:topics/houseprices","name":"houseprices","description":"","title":"House prices","url":"/topic.houseprices"},{"tagId":"westpaciq:topics/cliffnotes","name":"cliffnotes","description":"","title":"Cliff notes","url":"/topic.cliffnotes"},{"tagId":"westpaciq:topics/boj","name":"boj","description":"","title":"BOJ","url":"/topic.boj"},{"tagId":"westpaciq:topics/construction","name":"construction","description":"","title":"Construction","url":"/topic.construction"},{"tagId":"westpaciq:topics/securitisation","name":"securitisation","description":"","title":"Securitisation","url":"/topic.securitisation"},{"tagId":"westpaciq:topics/cmbs","name":"cmbs","description":"","title":"CMBS","url":"/topic.cmbs"},{"tagId":"westpaciq:topics/rmbs","name":"rmbs","description":"","title":"RMBS","url":"/topic.rmbs"},{"tagId":"westpaciq:topics/boe","name":"boe","description":"","title":"BOE","url":"/topic.boe"},{"tagId":"westpaciq:topics/businessconditions","name":"businessconditions","description":"","title":"Business conditions","url":"/topic.businessconditions"},{"tagId":"westpaciq:topics/wages","name":"wages","description":"","title":"Wages","url":"/topic.wages"},{"tagId":"westpaciq:topics/asia","name":"asia","description":"","title":"Asia","url":"/topic.asia"},{"tagId":"westpaciq:topics/japan","name":"japan","description":"","title":"Japan","url":"/topic.japan"},{"tagId":"westpaciq:topics/canada","name":"canada","description":"","title":"Canada","url":"/topic.canada"},{"tagId":"westpaciq:topics/trade","name":"trade","description":"","title":"Trade","url":"/topic.trade"},{"tagId":"westpaciq:topics/property","name":"property","description":"","title":"Property","url":"/topic.property"},{"tagId":"westpaciq:topics/dairy","name":"dairy","description":"","title":"Dairy","url":"/topic.dairy"},{"tagId":"westpaciq:topics/fiscalpolicy","name":"fiscalpolicy","description":"","title":"Fiscal policy","url":"/topic.fiscalpolicy"},{"tagId":"westpaciq:topics/oil","name":"oil","title":"Oil","url":"/topic.oil"},{"tagId":"westpaciq:topics/billevans","name":"billevans","description":"","title":"Bill Evans","url":"/topic.billevans"},{"tagId":"westpaciq:topics/cny","name":"cny","description":"","title":"CNY","url":"/topic.cny"},{"tagId":"westpaciq:topics/cardtracker","name":"cardtracker","description":"","title":"Card Tracker","url":"/topic.cardtracker"},{"tagId":"westpaciq:topics/agriculture","name":"agriculture","description":"","title":"Agriculture","url":"/topic.agriculture"},{"tagId":"westpaciq:topics/coal","name":"coal","description":"","title":"Coal","url":"/topic.coal"},{"tagId":"westpaciq:topics/cad","name":"cad","description":"","title":"CAD","url":"/topic.cad"},{"tagId":"westpaciq:topics/pboc","name":"pboc","description":"","title":"PBOC","url":"/topic.pboc"},{"tagId":"westpaciq:topics/confidence","name":"confidence","description":"","title":"Confidence","url":"/topic.confidence"},{"tagId":"westpaciq:topics/marketoutlook","name":"marketoutlook","description":"","title":"Market Outlook","url":"/topic.marketoutlook"},{"tagId":"westpaciq:topics/nsw","name":"nsw","description":"","title":"NSW","url":"/topic.nsw"},{"tagId":"westpaciq:topics/model","name":"model","description":"","title":"Model","url":"/topic.model"},{"tagId":"westpaciq:topics/government","name":"government","description":"","title":"Government","url":"/topic.government"},{"tagId":"westpaciq:topics/vic","name":"vic","description":"","title":"VIC","url":"/topic.vic"},{"tagId":"westpaciq:topics/qld","name":"qld","description":"","title":"QLD","url":"/topic.qld"},{"tagId":"westpaciq:topics/lng","name":"lng","description":"","title":"LNG","url":"/topic.lng"},{"tagId":"westpaciq:topics/federalbudget","name":"federalbudget","description":"","title":"Federal Budget","url":"/topic.federalbudget"},{"tagId":"westpaciq:topics/sa","name":"sa","description":"","title":"SA","url":"/topic.sa"},{"tagId":"westpaciq:topics/wa","name":"wa","description":"","title":"WA","url":"/topic.wa"},{"tagId":"westpaciq:topics/dwellingapprovals","name":"dwellingapprovals","description":"","title":"Dwelling approvals","url":"/topic.dwellingapprovals"},{"tagId":"westpaciq:topics/data","name":"data","description":"","title":"Data","url":"/topic.data"},{"tagId":"westpaciq:topics/G10","name":"G10","description":"","title":"G10","url":"/topic.G10"},{"tagId":"westpaciq:topics/tas","name":"tas","description":"","title":"TAS","url":"/topic.tas"},{"tagId":"westpaciq:topics/fairvalue","name":"fairvalue","description":"","title":"Fair value","url":"/topic.fairvalue"},{"tagId":"westpaciq:topics/esg","name":"esg","description":"","title":"ESG","url":"/topic.esg"},{"tagId":"westpaciq:topics/economiccalendar","name":"economiccalendar","description":"","title":"Economic Calendar","url":"/topic.economiccalendar"},{"tagId":"westpaciq:topics/population","name":"population","description":"","title":"Population","url":"/topic.population"},{"tagId":"westpaciq:topics/leadingindex","name":"leadingindex","description":"","title":"Leading Index","url":"/topic.leadingindex"},{"tagId":"westpaciq:topics/manufacturing","name":"manufacturing","description":"","title":"Manufacturing","url":"/topic.manufacturing"},{"tagId":"westpaciq:topics/energy","name":"energy","description":"","title":"Energy","url":"/topic.energy"},{"tagId":"westpaciq:topics/metals","name":"metals","description":"","title":"Metals","url":"/topic.metals"},{"tagId":"westpaciq:topics/steel","name":"steel","description":"","title":"Steel","url":"/topic.steel"},{"tagId":"westpaciq:topics/carbonpricing","name":"carbonpricing","description":"","title":"Carbon pricing","url":"/topic.carbonpricing"},{"tagId":"westpaciq:topics/nt","name":"nt","description":"","title":"NT","url":"/topic.nt"},{"tagId":"westpaciq:topics/ssa","name":"ssa","description":"","title":"SSA","url":"/topic.ssa"},{"tagId":"westpaciq:topics/nzconsumerconfidence","name":"nzconsumerconfidence","description":"","title":"NZ consumer confidence","url":"/topic.nzconsumerconfidence"},{"tagId":"westpaciq:topics/gold","name":"gold","description":"","title":"Gold","url":"/topic.gold"},{"tagId":"westpaciq:topics/pacific","name":"pacific","description":"","title":"Pacific","url":"/topic.pacific"},{"tagId":"westpaciq:topics/aluminium","name":"aluminium","description":"","title":"Aluminium","url":"/topic.aluminium"},{"tagId":"westpaciq:topics/png","name":"png","description":"Papua New Guinea","title":"PNG","url":"/topic.png"},{"tagId":"westpaciq:topics/datax","name":"datax","description":"","title":"DataX","url":"/topic.datax"},{"tagId":"westpaciq:topics/election","name":"election","description":"","title":"Election","url":"/topic.election"},{"tagId":"westpaciq:topics/tourism","name":"tourism","description":"","title":"Tourism","url":"/topic.tourism"},{"tagId":"westpaciq:topics/redbook","name":"redbook","description":"","title":"Red Book","url":"/topic.redbook"},{"tagId":"westpaciq:topics/tax","name":"tax","description":"","title":"Tax","url":"/topic.tax"},{"tagId":"westpaciq:topics/mining","name":"mining","description":"","title":"Mining","url":"/topic.mining"},{"tagId":"westpaciq:topics/financeam","name":"financeam","description":"","title":"Finance AM","url":"/topic.financeam"},{"tagId":"westpaciq:topics/aofm","name":"aofm","description":"","title":"AOFM","url":"/topic.aofm"},{"tagId":"westpaciq:topics/inflationlinked","name":"inflationlinked","description":"","title":"Inflation-Linked","url":"/topic.inflationlinked"},{"tagId":"westpaciq:topics/payments","name":"payments","description":"","title":"Payments","url":"/topic.payments"},{"tagId":"westpaciq:topics/nzindustryinsights","name":"nzindustryinsights","description":"","title":"NZ Industry Insights","url":"/topic.nzindustryinsights"},{"tagId":"westpaciq:topics/nzagriupdate","name":"nzagriupdate","description":"","title":"NZ Agri Update","url":"/topic.nzagriupdate"},{"tagId":"westpaciq:topics/renewables","name":"renewables","description":"","title":"Renewables","url":"/topic.renewables"},{"tagId":"westpaciq:topics/nzregions","name":"nzregions","description":"","title":"NZ Regions","url":"/topic.nzregions"},{"tagId":"westpaciq:topics/traderecommendation","name":"traderecommendation","description":"","title":"Trade recommendation","url":"/topic.traderecommendation"},{"tagId":"westpaciq:topics/sustainablefinance","name":"sustainablefinance","description":"","title":"Sustainable finance","url":"/topic.sustainablefinance"},{"tagId":"westpaciq:topics/infrastructure","name":"infrastructure","description":"","title":"Infrastructure","url":"/topic.infrastructure"},{"tagId":"westpaciq:topics/swaption","name":"swaption","description":"","title":"Swaption","url":"/topic.swaption"},{"tagId":"westpaciq:topics/payrolls","name":"payrolls","description":"","title":"Payrolls","url":"/topic.payrolls"},{"tagId":"westpaciq:topics/financialservices","name":"financialservices","description":"","title":"Financial services","url":"/topic.financialservices"},{"tagId":"westpaciq:topics/swapspread","name":"swapspread","description":"","title":"Swap spread","url":"/topic.swapspread"},{"tagId":"westpaciq:topics/fxdaily","name":"fxdaily","description":"","title":"FX Daily","url":"/topic.fxdaily"},{"tagId":"westpaciq:topics/quarterlybusinesssnapshot","name":"quarterlybusinesssnapshot","description":"","title":"Quarterly Business Snapshot","url":"/topic.quarterlybusinesssnapshot"},{"tagId":"westpaciq:topics/semifactsheet","name":"semifactsheet","description":"","title":"Semi factsheet ","url":"/topic.semifactsheet"},{"tagId":"westpaciq:topics/boc","name":"boc","description":"","title":"BOC","url":"/topic.boc"},{"tagId":"westpaciq:topics/supplychain","name":"supplychain","description":"","title":"Supply chain","url":"/topic.supplychain"},{"tagId":"westpaciq:topics/climatechange","name":"climatechange","description":"","title":"Climate change","url":"/topic.climatechange"},{"tagId":"westpaciq:topics/fiji","name":"fiji","description":"","title":"Fiji","url":"/topic.fiji"},{"tagId":"westpaciq:topics/nzhometruths","name":"nzhometruths","description":"","title":"NZ Home Truths","url":"/topic.nzhometruths"},{"tagId":"westpaciq:topics/socialfinance","name":"socialfinance","description":"","title":"Social finance","url":"/topic.socialfinance"},{"tagId":"westpaciq:topics/relativevalue","name":"relativevalue","description":"","title":"Relative value","url":"/topic.relativevalue"},{"tagId":"westpaciq:topics/luciellis","name":"luciellis","description":"","title":"Luci Ellis","url":"/topic.luciellis"},{"tagId":"westpaciq:topics/covid","name":"covid","description":"","title":"COVID-19","url":"/topic.covid"},{"tagId":"westpaciq:topics/horticulture","name":"horticulture","description":"","title":"Horticulture ","url":"/topic.horticulture"},{"tagId":"westpaciq:topics/sustainabilitylinkedloans","name":"sustainabilitylinkedloans","description":"","title":"Sustainability linked loans","url":"/topic.sustainabilitylinkedloans"},{"tagId":"westpaciq:topics/hospitality","name":"hospitality","description":"","title":"Hospitality","url":"/topic.hospitality"},{"tagId":"westpaciq:topics/qeo","name":"qeo","description":"","title":"QEO","url":"/topic.qeo"},{"tagId":"westpaciq:topics/transport","name":"transport","description":"","title":"Transport","url":"/topic.transport"},{"tagId":"westpaciq:topics/greenbonds","name":"greenbonds","description":"","title":"Green bonds","url":"/topic.greenbonds"},{"tagId":"westpaciq:topics/sandp","name":"sandp","description":"","title":"S\u0026P","url":"/topic.sandp"},{"tagId":"westpaciq:topics/meat","name":"meat","description":"","title":"Meat","url":"/topic.meat"},{"tagId":"westpaciq:topics/forestry","name":"forestry","description":"","title":"Forestry","url":"/topic.forestry"},{"tagId":"westpaciq:topics/digitisation","name":"digitisation","description":"","title":"Digitisation ","url":"/topic.digitisation"},{"tagId":"westpaciq:topics/defence","name":"defence","description":"","title":"Defence","url":"/topic.defence"},{"tagId":"westpaciq:topics/creditfan","name":"creditfan","description":"","title":"Credit fan","url":"/topic.creditfan"},{"tagId":"westpaciq:topics/health","name":"health","description":"","title":"Health","url":"/topic.health"},{"tagId":"westpaciq:topics/bobs","name":"bobs","description":"","title":"BoBs","url":"/topic.bobs"},{"tagId":"westpaciq:topics/coasttocoast","name":"coasttocoast","description":"","title":"Coast to coast","url":"/topic.coasttocoast"},{"tagId":"westpaciq:topics/apra","name":"apra","description":"","title":"APRA","url":"/topic.apra"},{"tagId":"westpaciq:topics/india","name":"india","description":"","title":"India","url":"/topic.india"},{"tagId":"westpaciq:topics/resources","name":"resources","description":"","title":"Resources","url":"/topic.resources"},{"tagId":"westpaciq:topics/futures","name":"futures","description":"","title":"Futures","url":"/topic.futures"}]}