From Westpac today:
Q4 net exports: +0.6ppts
Net exports made a sizeable contribution to growth in Q4 of 0.65ppts (rounding down to 0.6ppts).
This outcome was a fraction below expectations (market median 0.7ppt, Westpac 0.8ppts.)
Exports advanced in Q4 by +2.4%qtr, +6.5%yr, a positive result underpinned by the resources sector. That said, the Q4 figure fell short of our estimated (Westpac f/c +3.5%qtr).
Imports declined further in Q4, -0.6%qtr, -4.6%yr, meeting expectations (Westpac f/ -0.5%).
Q4 public demand
Public demand surprised to the high, up 1.2%, on a bounce in the volatile investment segment. (Westpac f/c -0.3%).
With the sector accounting for just over 20% of the economy, the Q4 outcome will see public demand add almost 0.3ppts to quarterly GDP growth.
Consumption was subdued, rising only 0.3% (Westpac f/c flat).
New public investment increased by 4.9% (Westpac f/c -1.5%).
Implications for Q4 GDP
We have shaved back our forecast for Q4 GDP growth to 0.8%qtr, 2.7%yr – from 0.9%qtr, 2.7%yr.
Growth was lopsided in the quarter. Net exports added 0.6ppts, on export strength, and we anticipate an improvement in household consumption, to 0.7%qtr from 0.4%qtr, consistent with a lift in sentiment and with retail sales up 0.9% in Q4. Elsewhere, conditions were weak, with businesses cutting investment spending and housing construction surprisingly flat.
