Earlier post here: Westpac cuts forecast to -0.2% q/q, 2.1% y/y (sliding from 3.3% in Q2)
Via Andrew Hanlan at Westpac (Senior Economist at Westpac Institutional Bank)
For Q3 GDP, we have lowered our forecast to -0.2%qtr, 2.1%yr.
- In Q3, net exports surprised to the low side, subtracting 0.2ppts
- Public demand surprised to the low side, contracting by 0.7%
- Domestic demand contracted in Q3 we estimate, -0.4%, with falls in home building activity, business investment and public demand.
- Inventories added to growth, with an unintended run-up in inventories
- We anticipate a modest 0.5% increase in private consumption, following a 0.4% increase in Q2.
- For Q3 GDP, we have lowered our forecast to -0.2%qtr, 2.1%yr.
Hanlan notes positives for the economy (bolding mine):
- Net exports have been trending higher (However, not so in mid-2016)
The terms of trade increase was larger than we anticipated, 4.4% vs 3.5% - The bounce in commodity prices is boosting export incomes, the terms of trade and national income.
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Check out all those subtractions from growth; unless private consumption comes in strong, the Q3 q/q print will be negative. If you look at retail sales for Q3, they did improve somehwta ... but enough to cover all those negatives, I think that's unlikely.
