From Westpac:
Q1 net exports: +1.4ppts
Net exports made a very sizeable contributution to growth in Q1, adding 1.4ppts. That exceeded expectations (mkt median 0.8 and Westpac 0.9).
Exports jumped by more than expected in Q1, up 4.8%, on strength in resources and rural goods, to be 10.4% higher than a year ago.
Imports contracted, -1.4%qtr and -2.2%yr in Q1, as mining investment turns down.
Net exports added 1.4ppts in the quarter and 2.7ppts to annual growth over the past year.
Q1 public demand
Public demand was soft, down 0.3%, although not quite as soft as we anticipated (-0.8%)
Consumption was subdued, rising 0.3% (Westpac f/c 0.2%).
New public investment weakened, partially reversing strength in Q4, down 3.1% (Westpac f/c -5%)
Implications for Q1 GDP
We have nudged up our forecast for Q1 GDP growth to 1.1%qtr, 3.4%yr (from 0.9%qtr, 3.2%yr).
In addition to a surge in exports, the opening quarter of 2014 saw: solid consumer spending, up a f/c 0.8%qtr, 2.9%yr; a sharp lift in new dwelling construction, up in excess of 7% qtr; a likely rise in business investment, following a sharp fall in Q4 and notwistanding a drop in mining investment; but a sizeable rundown of inventories, including farm inventories, subtracting around 0.7ppts from growth.
