Business Research & Insights

Shifting balance of risks sees February 2025 firm for first rate cut – but easing still likely gradual.

Growth weak as consumers remain on sidelines.

The August employment data showed the unemployment rate ticked down to 4.2%, as widely expected, but payrolls growth has slowed and a trend rise in the unemployment rate is still intact.

Consumer spending, according to NAB’s transaction data, went up 0.5% in both retail and total spending after being broadly flat last month.

Business confidence fell 5pts to -4 index points, with significant falls in recreation & personal services, transport & utilities, construction and manufacturing.

GDP rose by 0.2% q/q (1.0% y/y) marginally weaker than we expected (and in line with consensus).

The NAB Commercial Property Index dipped sharply to a below average level in the June quarter as the economy tracked through a weak period of growth and business conditions waned. Sentiment weakened in all property market sectors - particularly retail property. Confidence also fell and was lower in all states bar WA with VIC the clear underperformer in all sectors - especially in office and retail markets.

On a month-on-month, seasonally adjusted basis, the index contracted in July (-2.6%), following downwardly revised growth in June (2.5%, was 2.8%).

Key points: NAB expects GDP growth will be +0.1% q/q in Q2 2024. This would represent another quarter of weak growth. Year ended growth would be 0.8% y/y which, outside of the 2020 COVID lockdowns, would be the weakest annual growth since the early 1990s. We expect another quarter of soft consumption growth, and further […]

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