Australia has entered its first recession in almost three decades, following the bushfires and the onset of the coronavirus crisis shutdown taking a toll on the nation's economy.
Treasurer Josh Frydenberg said Australia’s economy shrunk by 0.3 per cent in the March quarter, with the ABS noting that the figures only captured the beginning of the health crisis.
The June quarter is forecast to be much worse, as Treasury expects June to show the economy experiencing the full impact of the Covid related restrictions.
In economic terms, a recession is two consecutive negative quarters in which a nation’s GDP falls.
“In response to this 1 in 100 year global event, we put in place a series of health measures that have hit the economy hard,” Frydenberg said on Wednesday.
Over the past 12 months Frydenberg said the economy grew 1.4 per cent, the figures show it reflects the weakest performance since the 2009 global financial crisis.
The residential construction sector faces a big headwind from a significant drop in net overseas migration, with a government stimulus package now announced.
The latest ABS figures show dwelling approvals fared better than expected in April, although building approvals data is not expected to reflect the Covid-19 impact until August.
HIA chief economist Tim Reardon says the building approvals data released on Wednesday relates to projects lodged with local councils well before the impact of the pandemic.
Total dwellings approved dropped 1.8 per cent in the month of April, driven by an 8.9 per cent drop in approvals for private attached dwellings such as apartments, townhouses and semi-attached homes.
House approvals increased 2.7 per cent in April.
“All states recorded a monthly increase in approvals with the exception of New South Wales which declined by 29.9 per cent during April driven by a fall in multi-unit approvals,” Reardon said.