Australia: Q3 GDP grew by a disappointing 0.4% – Westpac

Analysts at Westpac, note that the Australian economy grew by a disappointing 0.4% in the September quarter for annual growth of 1.7% and was slightly below the market consensus forecast of 0.5% and the Westpac forecast of 0.6%.

Key Quotes

“Of most concern is that this represents the fifth consecutive quarter where private final demand, which declined by 0.3% in September, either contracted or was flat.”

“Within private final demand the most surprising undershoot was household consumption, which expanded by only 0.1%. While volatile, we assess trend household consumption growth at around 2.7%yr. However over the last year household consumption has grown by only 1.2%.”

“The contraction in the dwelling construction cycle continued into the September quarter. New dwelling construction contracted by 2.8% to be down by 11.0% over the year. Complemented by an annual fall of 7.1% in alterations and additions, total dwelling construction is down by 9.6%.”

“Growth continued to be boosted by public demand (+1.7% for the quarter and 5.2% for the year).”

“The Federal Government and the Reserve Bank will be disappointed with this result. A lift in annual output growth from 1.6% to 1.7% is hardly a “gentle turning point” when private final demand contracted by 0.3% following a 0.1% contraction in the June quarter.”

“RBA rate cuts have had some impact with house prices lifting nationally by 2.3% (including 3.5% in Sydney and Melbourne) in the September quarter. This turnaround has clearly failed to boost spending in the quarter although any wealth effect is likely to have substantial lags.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD stays below 1.3350 on poor UK PMIs

GBP/USD hits fresh session lows of 1.3335 following an unexpected drop in the UK's Preliminary Manufacturing and Service PMI reports. However, the downside appears capped amid growing Brexit optimism. 


EUR/USD keeps range around 1.1130 on downbeat PMIs

EUR/USD trims gains to trade near 1.1130 region after the sentiment around the euro was dented by the disappointing German and Eurozone Preliminary Manufacturing PMIs. Trade concerns also keep the gains limited. 


The phantom of fear pierces crypto market foundations

Negative technical indicators are extremely volatile and are approaching a technical rebound. Ethereum has fundamentals in play versus Bitcoin which could be lethal. XRP is not immune to downfalls and adds to the dangerous game of critical supports.

Read more

Gold consolidates in a range, flat-lined around $1475 level

Gold extended its sideways consolidative price action through the early European session on Monday and remained confined in a narrow trading band near the $1475 region.

Gold News

USD/JPY clings to modest gains, just below mid-109.00s

The USD/JPY pair edged higher on the first day of a new trading week, albeit lacked any strong follow-through and remained well within the previous session's trading range.