ONLY CHARTS #160

Aus Q2 government demand, Aus Q2 trade, NZ Q2 trade, Aus mining labour costs & productivity

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1. Underlying public demand rose +0.9% q/q in Q2 in Australia (Q1: +0.8% q/q) and contributed ¼ppt to quarterly GDP growth. This was close to our +1% q/q forecast.

Public inventories also contributed nearly 0.2ppts to Q2 GDP growth after subtracting 0.3ppts in Q1.

Government consumption rose a strong +1.4% q/q (Q1: +1.2% q/q), with national non-defence spending up a whopping +2.3% q/q.

Underlying government investment (-1.4% q/q) again declined (this excludes net asset transfers which don’t affect GDP).

Over the year to Q2 2024, government consumption contributed a significant 1ppt to Australia’s GDP growth.

2. Net exports contributed nearly 0.2ppts to Australia’s Q2 GDP growth. Consensus was for +0.6ppts but we have no idea how such large estimates were formed given signals from partial indicators for goods exports.

We expected a broadly flat contribution to growth, with the upside surprise largely due to a +5.6% q/q jump in services exports.