Analysts at NAB suggest that the economy looks to have recorded another reasonable quarter of growth in Q2 (+0.7% q/q), although there is slight downside risk to this forecast from a weak Q2 Capex print.
Key Quotes
“Next week’s partials may be stronger than expected, so we’ll stick with 0.7% for now. Growth will be driven by public sector infrastructure investment, non-mining business investment, household consumption and dwelling investment.”
“Net exports are expected to make little-to-no contribution to growth this quarter, with a rise in imports offsetting continued growth in LNG and other commodity exports. Beyond Q2, we expect exports growth to continue to support GDP, albeit with a drag from rural exports due to the east coast drought, while the handover from the mining sector to non-mining continues.”
“For the household sector, we expect only moderate growth in consumption until wage growth picks up, with tax cuts only coming into play in Q3 2019.”
“Dwelling investment is expected to be strong this quarter (likely reflecting the unusually dry weather on the east coast) but medium-term will ease back slightly.”
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