Powered by MOMENTUM MEDIA
subscribe to our newsletter

GDP result ‘shockingly weak’: ANZ

Fresh figures released yesterday found that Australia’s economy contracted during the September 2016 quarter, however ANZ says there are a number of temporary elements to the result and expects a bounce-back in Q4.

The Australian GDP declined by 0.5 per cent quarter-on-quarter, bringing annual growth down to 1.8 per cent, which according to ANZ is a “shockingly weak” result.

In its latest Australian Economic Update, ANZ said that although recent data pointed to a low outcome, the degree of weakness in the report is “surprising”.

“For us, the surprise has come from particular weakness in the income measure of GDP (-0.7 per cent q/q) with small business profits down particularly sharply, as well as broad-based weakness in the production measure of GDP,” Felicity Emmett, head of Australian economics, commented.

Ms Emmett added that ANZ believes the results overstate the underlying weakness in the economy, however some of the weaknesses are likely to be reversed in the next quarter.

Advertisement
Advertisement

PROMOTED CONTENT


“Housing is likely to rebound given the amount of work in the pipeline, resources exports should grow strongly given ongoing expansion in LNG supply, and profits growth should pick up supported by higher commodity prices and a bounce back in small business profits,” she said.

“Moreover, consumer spending (which accounts for around 55 per cent of GDP) looks likely to pick up given the acceleration in retail sales over the past couple of months,” she added.

Ms Emmett remarked that overall the result suggests some loss of momentum in the economy, which is consistent with the slowdown in employment growth.

“Total business investment remains particularly weak, with mining investment continuing to be a substantial drag, housing construction is clearly at or close to a peak, and growth in consumer spending has slowed sharply from the rates seen late last year and early this year,” she elaborated.

Ultimately, Ms Emmett noted that while the RBA is “likely to be disappointed” with the apparent loss of momentum in the economy, she expects that it is likely to retain its easing bias for some time yet, “despite market enthusiasm for rate hikes”.

[Related: Government spending and housing drives Q2 GDP]

GDP result ‘shockingly weak’: ANZ
mortgagebusiness

Latest News

The chairman of the financial services regulator has resigned from his position, effective immediately. ...

Refinancing settlements for the first nine months of the calendar year 2020 are up 27 per cent on last year’s volumes, having peaked in Ju...

The Tasmanian-based lender has seen a 43 per cent rise in settlements in the first quarter of the financial year, driven by strong demand fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.