Behind the GDP figures – the numbers are frightening

The worst national economic figures since the early 1990s reveal the breadth of the slowdown confronting the national economy.

Restaurants and cafes are going quiet; car dealerships are seeing sales plunge; even the alcohol and cigarette trades are gloomy.

The GDP report – which tallies the spending, production and investment decisions of households and businesses – is a depiction of industry in distress.

Pacific Brands’s spotlighted the problem in manufacturing.

Yesterday’s report confirmed a full-blown manufacturing recession.

Manufacturing – the fourth-biggest employer in NSW – contracted 4.7 per cent in the December quarter alone. That’s an 18.8 per cent annual drop in the size of the sector.

The textiles, clothing and footwear industry contracted 8.5 per cent in the year to the end of December.

Printing and media withered 7.6 per cent. Food production dropped 3.4 per cent in the year.

Without the burst of agricultural production, the contraction in the national economy would have been even more dire.

Stripping out the farm sector, the economy shrunk 0.8 per cent in the quarter – on a par with the contractions seen in the early 1980s and 1990s recessions.

Helped by $8.7 billion in hand-outs in December, retail held up reasonably well.

Car sales have fallen off a cliff. Clothing and footwear sales dropped 1.3 per cent in the quarter, alcohol trade fell 2.4 per cent. Cigarette sales were 0.2 per cent down.

The global crisis is now starting to hit the real economy – and confidence appears at a particularly low ebb.

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