AU GDP: Another disappointing report card with growth lopsided, weak private demand – Westpac

Ahead of next Wednesday’s Australian third quarter (Q3) Gross Domestic Product (GDP) data, Westpac came out with its preview. The bank anticipates a downbeat growth figure while citing sluggish private demand.

Key quotes

“We anticipate yet another disappointing report card - with growth lopsided and private demand weak.”

“The backdrop, the economy lost considerable momentum from mid-2018. Annual real GDP growth slowed from an above trend 3.1% to 1.4% currently - the softest result since 2009 and a pace below population growth, of 1.6%.”

“The housing sector turned from boom-to-bust, as lending conditions tightened further, and consumer spending slowed, constrained by weak wages growth - a key structural challenge. The global economy also lost momentum and uncertainties increased on the escalating trade war.”

“RBA rate cuts and modest personal income tax cuts have had a mixed impact to date. Consumer spending remains weak, while the housing sector is responding - albeit in an uneven fashion, with prices rising but dwelling approvals still soft.”

“Private demand, on our figuring, was flat in the quarter and contracted by 0.4% over the past five quarters - an extended period of weakness, matching that in the downturn of 2000 and the softest results since the early 1990s recession.”