GDP +0.5%/+2.5% broadly in line with expectations. QLD falls again

Today’s release of the fourth quarter 2014 GDP data has come in broadly in line with market expectations. Quarterly growth was +0.5% for an annual increase of 2.5%. This compares with +0.4% q/q in Q3 (revised up from +0.3%) and +2.7% ann. The main drivers of growth were net exports (largely on the back of weaker imports) which added 0.7ppts and household consumption which added 0.5ppts; the main negative was inventories which deducted 0.6ppts. If there is a bright point in this data it is from the household consumption figures. The quarterly increase of 0.9% was the fastest rate of growth since the first quarter in 2012. This seeming improvement in household confidence is reflected in a fall in the household saving rate which dropped to 9.0%; its lowest level since Q2 2010.

The Implied Price Deflator data confirms what we already know; inflation is of no concern at present. The GDP IPD fell by 0.7% over the year after a flat result in Q4. The Gross National Expenditure IPD (which removes the impact of foreign trade prices) was up just 1.6%, broadly in line with the CPI at 1.7%.

Clearly national GDP growth remains well below the long-term trend of about 3.25%.



In Queensland things look even less rosy. The quarterly State Final Product data (which does not account for net exports and therefore downplays QLD’s performance since we are such a major source of foreign exports) shows a decline of 1.0% for the quarter and is the second consecutive quarter of falls (Q3 was down 1.7%). Annually SFD is down 3.4% which is the fastest rate of decline since Q3 2009.

Household consumption in QLD actually held up reasonably well (+0.8% q/q) but it was a sharp fall in Private Fixed Investment (down 2.8% q/q) that dragged the state’s figures down. This is disappointing but not surprising given the much discussed mining investment slowdown and its dramatic impact in QLD.



  1. Qld economy hit by declines in both private and public sector capital spending | Queensland Economy Watch says:

    March 4th, 2015 at 12:32 pm

    […] a large shock from a decline in resources sector capital spending (see Pete Faulkner’s post GDP +0.5%/+2.5% broadly in line with expectations. QLD falls again). However, it was a bit surprising that a drop in public sector capital/investment spending, […]

Leave a Response

  • © Conus Business Consultancy Services 2021

    Website created by RJ New Designs