Later this morning the ABS will release its September quarter GDP report, a release that is likely to show Australian economic growth accelerated in the third quarter of 2015.
Here’s the state of play.
- Firstly, while still an important report, the GDP data is dated. It essentially tells you where the economy has been, not where it is going.
- The most widely recognised GDP measure is called the chain volume approach, or real GDP. It measures changes in the quantity of goods and services produced, removing the effect of price movements.
- In the June quarter the economy grew by 0.2%, the smallest quarterly increase since the economy contracted 0.4% in the March quarter of 2011.
- Household and government consumption, adding 0.3 and 0.4 percentage points to growth respectively, were able to offset weakness from net exports, inventories and private fixed capital formation.
- The weak quarterly reading left the annual growth rate at 2.0%, the lowest level since the September quarter of 2013.
- With most GDP inputs now received, economists expect economic growth to have rebounded in the three months to September.
- According to a survey conducted by Bloomberg, economists expect quarterly growth of 0.8%, leaving the annual rate at a still sub-trend level of 2.4%.
- Having detracted from growth in the June quarter, net exports are expected to add 1.5 percentage points to the September growth figure, helping to offset expected weakness from public demand and business investment. Inventories are tipped to make no overall contribution to growth.
- While the partial GDP inputs have been on balance strong, the largest contributor to economic growth – household consumption – won’t be known until the GDP report is released.
- Retail sales volumes, making up around 30% of household consumption, rose 0.6% during the September quarter. If replicated for services, it will likely add around 0.3 percentage points to the quarterly GDP figure.
The ABS will release the GDP report at 11.30am AEDT. Business Insider will have full coverage as soon as the data drops.
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