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Andrew Hanlan, analyst at Westpac, points out that the soft tone of Australia’s Business Indicators survey for December is pointing towards a sluggish conditions late in 2018.

Key Quotes

“Inventories levels declined and profits rose, but only modestly so.”

“The income data broadly met our expectations while inventories provided a small downside surprise.”

“Our forecast for Q4 GDP remains 0.2%qtr, 2.4%yr. Recall that we downgraded our forecast last week in the wake of news that construction activity contracted sharply.”

“In the December quarter, company profits grew by only a modest 0.8%. That was below expectations but broadly as we anticipated (market median 3.0% and Westpac 1.0%).”