The first quarter GDP data released this morning has surprised the market coming in at +0.9% (exp +0.7%) for an annual rate of +2.3% (exp +2.1%). As a result the A$ took a short rally higher; although that now appears to have rather run out of steam.
Stronger growth came from net exports (adding 0.7 ppts) and household consumption (added 0.3 ppts). Despite household consumption growth remaining fairly lack-lustre (+0.5% q/q for a +2.5% rate for the year) the fact that it continue to outstrip both GDP and disposable income growth is reflected in yet another fall in the household saving rate (down to 8.3% from 8.8%). Although by historical standards this is still a high rate of saving, it is the lowest we have seen since the GFC-induced paradigm shift for households in ’08-’09.
In Queensland we saw State Final Demand grow, albeit by just 0.1%, for the first time in three quarters. here too it was the household that led the growth with household consumption up 0.9% q/q. Private CAPEX fell sharply (-4.1% q/q) while the much smaller component of Public CAPEX saw a 6.9% spike up. This growth in SFD is more than likely to mean that Gross State Product for Q1 (once the numbers are crunched by QLD Treasury) should return to positive territory after the two negative quarters (which has been much discussed in recent days…see our commentary here).
However, it is also more than likely that the QLD Budget in July will need to revise down growth forecasts for 2014-15 from the previous +3%.
This quarter’s CONUS Quarterly includes more details on today’s GDP numbers as well as an in-depth analysis of the state of the economy in FNQ. It’s available for download here…Conus Quarterly Jun 2015