Australia GDP Preview – Q3 2015

• Economic partials for Q3 have been mixed, but point to stronger real GDP growth of 0.8% in the quarter (up from 0.2% in Q2), as a series of one-offs that weighed on Q2 growth recede. Looking through the quarterly volatility, year-ended growth is forecast to remain sub-trend notwithstanding a small bounce to 2.4% y/y.
• Despite the mixed results across the partials, the theme is likely to be consistent with the much anticipated (and ongoing) sharp decline in mining investment, with offsetting strength in export volumes. Consumption and dwelling investment are making a modest positive contribution, while public demand is expected to fall as spending was brought forward to Q2.
• Overall, the National Accounts are still expected to evidence a somewhat more entrenched recovery in the non-mining sector, although non-mining investment remains notably absent.
• Our forecasts are broadly in line with RBA expectations in the latest Statement on Monetary Policy. We expect no change at the December meeting on Tuesday.
• While GDP is normally an important release for the AUD and short-dated yield reactions, we do not expect this release to have a sustained impact on market pricing coming just in front of the week’s much bigger global risk events (ECB and US payrolls).

For more information please refer to the attached report:

• Australia GDP Preview – Q3 2015 (PDF, 276KB)