Lack lustre GDP growth continues; QLD benefits from revisions

Posted on March 7, 2018 by Pete Faulkner - GDP, QLD, State Accounts, Uncategorized

Today’s release from the ABS of the 4th quarter 2017 GDP data confirms the lack lustre performance of the Australian economy. Growth in the quarter (seasonally adjusted) was in line with market expectations at +0.4%, although upward revisions to back quarters saw the year-on-year rate slightly beat expectations at +2.4% (although this is well down from the +2.9% growth seen in Q3). On an annual basis growth remains stable at +2.3%.

Household consumption was the primary source of growth, it grew 1.0% in the quarter (the best result since Q1 2016) adding 0.6 ppts while net exports and Private fixed investment were the largest drags (both deducting 0.5 ppts).

In Queensland the State Final Demand data shows the domestic side of the economy growing at between 2.6% (seasonally adjusted) and 2.9% (Trend) for the year. Both these represent falls from previous the previous quarter (sa +3.1%, Trend +3.0%). The ABS data showed some fairly large upward revisions to the Queensland SFD data for past quarters which lifted annual Trend growth in the third quarter from +2.8% to +3.1%; this latest data sees that measure stable at 3.1%. As we noted in yesterday’s post on the QLD Treasury State Accounts (see here), such an upward revision was not unexpected.

Trend growth across both private and public sectors is similar at +0.7% q/q with Household expenditure up 0.5% and Private fixed investment growing at 1.3%. The reason for the slowdown in the Queensland pace of growth is due to downturn in Trend Public Fixed Investment, which fell again by 1.8% this quarter (after a fall of 2.6% in Q3), while general government expenditure was up 1.4%.