QLD State Accounts show the positive effect of Intl Exports and the slowdown in Private Business Investment

Yesterday saw the release of the Queensland Treasury State Accounts for the third quarter of 2015. There was some predictable spruiking of the data from the Treasurer as he focused on the Trend series which shows Gross State Product (GSP) rose 0.9% q/q and 2.6% annualised. This is stronger than the Trend GDP numbers for the nation (+0.6%, +2.3%) released at the start of December. While we accept that there are issues surrounding the focus on the Trend series (and Gene Tunny has written extensively and well on this subject here) and they are certainly liable to revision in coming quarters, we also believe that the Trend data does give us a more balanced view of where the economy sits. Pollies will argue (as they have done..see here) as to the validity of the Treasury quarterly data as opposed to the annual ABS State numbers, but we cannot see why a Treasurer of either colour would choose to ignore the more timely quarterly data from their own Treasury!

What an analysis of the data shows us is that, while overall growth may indeed be looking relatively healthy, there remain some real concerns. Private Capital Investment deducted 18.4 ppts from annual growth. In particular, Business Investment deducted 31.1 ppts while Dwellings added 12.1 ppts (see last chart below). Net Exports (which covers both Intl and Inter-state) contributed 1.4 ppts with Net International Exports in particular adding 5.7 ppts. The total value of Intl Exports at $4.4 bn was the highest since Q1 2002 while the Total Net Exports deficit ($560m) shrank to its lowest level since Q2 2003.

Household consumption added 2.7 ppts to growth while Govt consumption added 4.4 ppts.

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