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Title of page: Economy of the Australian Capital Territory

The economy of the Australian Capital Territory (ACT) is the fastest-growing, sixth biggest economy of Australia Since the introduction of its self-government status in 1989, and with few exceptions in 1992, 1996, and 2014, the ACT economy has exhibited positive growth at a 1991-2018 average of 3.17 percent per year. A vast majority of the economy is concentrated in Canberra, the capital city of Australia, and is composed primarily (about 75%) by service industries, particularly those related to the administration of federal and local government. Construction also contributes to an important part of the economy, boosted by large government-funded projects and an active residential market. In contrast to other Australian states and territories, primary sectors such as agriculture, forestry, and mining, represent a very small proportion of the economy (±1%).

, the ACT exhibits the lowest unemployment rate at 3.6 percent, with almost a third of workers being employed in the public sector. Inflation in has been slightly greater than the national rate since mid 2017, reaching 1.8% in the year to Q1 2019. As per the 2016 census, median weekly personal income was A$998, while in 2017-18 total yearly disposable income per capita in was A$91,336.



Gross State Product
In the 2017-18 financial year, ACT real gross state product (real GSP) was 39.44 billion dollars, which represented a 4.0% increase over the previous year. From 1990 to 2018, average real GSP yearly growth has been 3.17%, ranking 4th among all Australian jurisdictions. Real GSP per capita in 2017-2018 was $94,831, a 1.8% increase over the previous year. Nominal GSP in 2017-18 reached 39.79 billion dollars, and $95,674 per capita. Overall, the ACT account for 2.2% of the national economy as of 2018 (a figure that has averaged 2.05% from 1990-2018).

, approximately 51.7% of ACT real GSP is composed by government expenditure and public gross fixed capital formation, 38.2% by household consumption (which figure includes transfer payments), 11.1% by private gross fixed capital formation (i.e. private investment), and negative 1% by net exports. Main three industries by gross value added are public administration and safety (25.9%), health care services (11.0%), and professional, scientific and technical services (8.7%).

Employment
Approximately 227,900 persons are employed in the ACT, about 63.5% of whom are full-time workers. As of the 2016 Census, professionals represented the largest proportion of workers (30.5%), followed by clerical and administrative workers, and managers. In terms of industry of occupation, over 30% are employed in public service jobs (including defence and safety), followed by health care and social assistance (10.4%) and education and training(9.6%). Between 2015-19, unemployment rate has averaged 4.08%. By Q1 2019, 3.6% of the 236,500 labour force remained unemployed.

Inflation and personal income
Inflation in Canberra (applies for the ACT ) rose by 0.1% in the first quarter of 2019, based on CPI changes from previous quarter. Year on year, CPI increased by 1.8% (by comparison, Australia rate of inflation was 1.3%). In June 2018 total yearly disposable income per capita in the ACT was A$91,336, with an average growth of 5.2% in 1990-2018.

Wages and salaries grew by 0.3% (quarterly) and 2.0% (year-on-year) as measured by the December 2018 wage price index (WPI), ranking the ACT wage growth second-weakest among all Australian jurisdictions. Such a low performance is the result of a sluggish WPI growth in the private sector.

In 2016, mean household net worth was A$875,482.

Property market
Median house prices experienced a 2.0% fall to A$685,000 through the year to March 2019, while median unit prices increased by 4.5% to A$459,900. Overall, median residential property prices increased by 0.9% to $532,000 over the same period. Such figures echoed a housing market downturn in Sydney, Melbourne and Perth that started in mid 2018. From 2014 to 2019, house and unit median prices grew by 26.9% and 7.0%, respectively. Number of dwelling unit commencements in Q4 2018 was 1,290, well above the 651 figure from a year before, ranking the ACT above all Australian jurisdictions by this measure. In 2017-18, residential building approvals were valued at A$1.7 billion, an all-time high since 2008-09. Non-residential building approvals stood at $1.3 billion, considerably below the $1.8 billion 2008-09 peak but still well above the A$0.6 billion trough in 2011-12.

Business climate
, non-employing businesses and businesses employing 1-19 employees jointly constituted 87% of the total 27,371 businesses in the Australian Capital Territory. In the same fiscal year, net increase in the number of businesses was 1,235, the largest increase since 2013-14. As of 2017-18, business counts grew by 4.4% to 28.566.

Agriculture and forestry
With a total land area of 2,431 km2, agriculture activity in the ACT employs approximately 15% of the territory, or 370 km2, as of 2017. Agricultural output in 2016-17 was valued at 11 million, which represented a very minor proportion (<1%) of ACT total GDP (A$37.9 billion) and Australia's agricultural production (A$61 billion). Cattle and calves, wool, sheep and lambs are the main components of agriculture activity, jointly accounting for 60% of total production of the 36 farms in operation as of 2016-17.

Construction
In 2017-18, construction industry in the ACT accounted for 6% of its GSP, or gross value added of A$2.4 billion. Large construction projects have provided the ACT economy with important stimulus since 2017. There were about 13,200 workers in this industry in 2016, or 5.8% of the ACT employed labour force. The number of construction businesses has consistently increased since 2015-16, with a total of 5,512 by June 2018. 39 percent of firms in this industry generated between A$200,000 and A$2 million in 2017-18.

Public administration and safety
The public sector is the main driver of economic performance in the ACT, as the largest portions of both employment and economic value are sourced from it.

In 2017-18, 25.9% of ACT GSP was made up of public administration and safety, by gross value added. Total GVA of this sector reached A$10.3 billion in the same year. Public sector jobs have been on the rise since 2001, growing by 70% between 2001-2016, the largest growth in employment by occupation in the ACT. As at 2016, almost a third (30.8%) of ACT workers were employed in the public sector. Due to the large dependency on its public sectors, the ACT economy is volatile to changes in government spending, with the biggest economic contributions and detractions in final state growth coming from it. Such economic risk, however, has been partially offset by small agriculture and mining sectors. In 2014, large-scale cuts in public service jobs, in conjunction with low levels of household consumption, reduced economic stimulus in subsequent years.

Health care and social assistance
About A$4.4 billion (11%) was contributed to ACT GSP by health care and social assistance in 2017-18, thus being the second largest industry in the state. There were 23,980 persons employed in this industry by 2016, which accounted for almost 11 percent all workers.

Semi-universal health services access in Australia, in conjunction with an ageing population and technological advancements, has increased the volume of activity in this sector. Although health services in the ACT are small in comparison to other states and territories, government spending in this industry between 2007 and 2012 averaged a 10.3% grow per year (and 4.1% from 2012 to 2017).