ONLY CHARTS #278

Aus Q4 public demand & trade, Aus retail trade, NZ building consents, NZ home listings

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Following the release of partial GDP indicators, we see modest upside risk to our running estimate of +0.5% q/q for Australia’s Q4 GDP growth. The RBA had pencilled in a bit over +0.4% q/q in the February SMP.

1. Underlying public demand (ex asset transfers) in Australia grew +1.0% q/q in Q4 and contributed nearly +0.3ppts to quarterly GDP growth. This was stronger than we had expected.

Separately, public inventories subtracted 0.2ppts from Q4 GDP growth after contributing 0.1ppts in Q3. This was in line with our expectation.

Government consumption rose +0.7% q/q, after growth in Q3 (+1.4% q/q) was boosted by state government subsidies and rebates.

Underlying government investment (excluding asset transfers) rose a strong +2.3% q/q in Q4. This surprised us as public investment rose sharply in Q3 (+6.7% q/q versus +5.3% q/q originally published) amid a large rise in defence spending.

Over the year to Q4, government consumption rose +5.1% and contributed +1.1ppts to Australia’s GDP growth.

2. Net exports contributed a little less than +0.2ppts to Australia’s Q4 GDP growth, which was above our expectation. All of the upside surprise was due to weaker-than-expected growth in imports, with services imports falling sharply.