While the ABS produce Gross State Product data only on an annual basis we must rely on the quarterly estimates from QLD Treasury for the intermediate periods. We’ll get the ABS estimates of State Final Demand for the first quarter 2020 tomorrow with the release of national GDP data, but today we see the Queensland Treasury’s estimates for the final quarter of last year.
We have previously seen some disparity in these two measures. However, we tend to see these disparities largely revised away over time. Last quarter we noted a disparity between the two measures for Q3 Gross State Expenditure/SFD and, as we expected, the revisions by Treasury this quarter saw GSE revised up from 0.8% q/q to 1.0% q/q to come more in line with the ABS estimate of a 1.2% q/q increase. GSP was also revised higher from +0.5% q/q to +1.1% q/q. The Treasury estimate for Q4 sees things advancing further with another +1.2% q/q increase taking the annual rate of GSP growth to +2.3% (from +1.8% in Q3) or +3.8% y/y (from +2.8% in Q3).
This most recent data up to the fourth quarter of 2019 shows Gross State Expenditure (the domestic portion of the economy) +0.3% q/q for an annual growth rate of just 1.1% (ABS may revise this tomorrow) or 1.0% (QLD Treasury). After upward revisions to the Q3 data this represents a slight slowing in annual growth of 0.1%.
The slowdown in domestic growth can be attributed to a continued sharp decline in Private Investment (down 6.6% annually, and down in each of the past 6 quarters) as both dwellings and business investment fell and subtracted 1.2 ppts from GSP. Compensating for at least some of this fall was Public Investment which was up 10.3% annually; however, public investment is only equal to about 30% of private and added just 0.5 ppts. Net exports added 1.0 ppts to GSP grwoth for the year.
As the chart below shows, for the past year or so Government Expenditure has been in the unusual position of exceeding the level of Private Capital Expenditure.