Westpac with the note.
The expenditure updates today, as well as yesterday (non-farm inventories), failed to provide any major surprises – each of the partials were broadly as we anticipated.
Net exports are a small negative for Q1 growth, subtracting -0.2ppts. That is a fraction less negative than we anticipated (a forecast -0.3ppts) but materially stronger than the market median forecast of -0.5ppts.
The export, import was as we anticipated.
Imports posted a strong rise of 3.2%, with broad based strength across goods and services (we had anticipated more strength in goods and less in services).
Exports were a fraction above forecast, up by 1.8% (vs a forecast 1.5%). The detail was as anticipated – goods subdued, up 0.7%, and services up strongly, +7.7%, with the border reopening facilitating a recovery in tourism and student numbers.
Public demand grew by 0.6%, not greatly different from the 0.8% forecast. The mix met expectations – consumption cresting, +0.1%, with the pull-back in covid related spending, while investment rose strongly in the period, up by 3.2%, centred on the upward trend in construction.
Public authority inventories are a fraction more negative than we anticipated, with a drag on Q1 growth of -0.16pps vs a forecast -0.1ppt.
Implications for Q1 GDP growth forecast
Our Q1 GDP forecast has been rounded up a fraction, to 0.3%qtr, 2.4%yr from 0.2%qtr.
This incorporates the slight upside on non-farm inventories (+0.3ppts rather than +0.2ppts), as well as the information from today.
