Surprise GDP slowdown
Surprise GDP slowdown
Posted on Wednesday, December 03 2014 at 1:54 PM
Third quarter GDP data released by the Australian Bureau of Statistics (ABS) shows an unexpected drop in activity.
A spokesperson for the Housing Industry
Association (HIA) says the numbers reveal Australia’s economy grew by just 0.3
per cent, an annual rate of 2.7 per cent when compared to the September quarter
last year.
This result compares poorly with growth of
0.5 per cent during the previous quarter.
The declining domestic demand affects
dwelling construction, government investment and private business investment.
Shane Garrett, HIA senior economist, says
most analysts were expecting growth well above the 0.5 per cent mark.
“At this stage, exports are the crucial
ingredient to keeping the economy on its feet, although new dwelling investment
remains healthy in terms of annual growth,” Garrett says.
New dwelling investment
contracted by 1.1 per cent during the September 2014 quarter, while renovations
activity experienced a decline of 0.7 per cent. Total dwelling investment
therefore fell by 0.9 per cent during the quarter. Compared with 12 months
earlier, new dwelling activity was 10.2 per cent higher, with renovations
activity up by 1.5 per cent.
Garrett believes the figures
will fuel appetite for more rate drops.
“Coming at a time when a more downbeat
perspective regarding Australia’s economic prospects was already in the
ascendancy, an elevated focus on a possible further rate cut is likely to be
one consequence of today’s result.”
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