Australian Q4 GDP data out a little earlier

Data is here

Q4 GDP (seasonally adjusted): +0.5% q/q

  • expected +0.6%, prior was +0.4%, revised from +0.3%

Q4 GDP: +2.5% y/y,

  • expected +2.5%, prior was +2.7%

-

  • Net exports added 0.7 percentage points to growth
  • Household consumption added 0.5 per cent
  • Offset by a 0.6 percentage point drop in inventories
  • Dwelling construction added 0.1 per cent (we got building approvals data yesterday, which came in very strong, so this should pick up in coming quarters ... Total building approvals are at a record high)

Initial response from Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital:

  • Housing & the consumer have picked up it has not been enough to offset the mining investment slump
  • Solid consumption, housing and net exports
  • Poor capx and inventory detraction
  • Gross National Expenditure was flat & just 1% y/y
  • Just as well for pick up in export volumes (net exports accounted for 60% of growth last year)
  • GDP growth over the last 3 quarters averaged just 1.9% at an annualised pace ... well below trend
  • The private consumption deflator is 1.6% y/y, real unit labour costs are 0.6% y/y; confirms lack of inflationary pressure
  • Factor in last March quarter (1.1%) and the next GDP result could slip below 2% at this rate