Downside risks for Australia’s Q3 GDP report continue to build following the release of September quarter business indicators from the ABS today.
Of note, private non-farm inventories were unchanged from the previous quarter, missing market expectations for an increase of 0.4%.
According to Westpac’s Australian economics team, this outcome will lop a sizeable 0.3 percentage points off quarterly GDP growth measured in expenditure terms, pointing to the potential for a sharp deceleration in economic activity from the levels reported in the three months to June.
“The expenditure estimate of GDP is tracking materially below our forecast of 0.7%,” says Andrew Hanlan, Senior Economist at Westpac.
“We had downside risks ahead of today and inventories have disappointed.”
Ahead of Australia’s Q3 GDP report on Wednesday, the ABS will release balance of payments and government demand figures on Tuesday, two reports that contain large components that will feed directly into the expenditure measure of GDP.
Before today’s release, the median economist forecast looked for a quarterly increase in Australia GDP of 0.6%.
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