Partial data received so far suggest that Australia’s economy will post only modest growth in Q1 2025 and is likely to show a negative per capita GDP print.
The Australian Bureau of Statistics’ (ABS) Household Spending Indicator (MHSI) recorded zero growth in volume terms in Q1 2025.
The latest ABS labour force release suggested that Australia’s population grew by 0.7% in Q1 2025, implying a commensurate 0.7% decline in per capita household consumption.
This week’s Q1 construction work done, as released by the ABS, posted a flat result for Q1 2025, implying a 0.7% decline in per capita terms.
Next, as Justin Fabo from Antipodean Macro shows below, total private machinery and equipment capital expenditure, which is an input to GDP calculations, fell by 1.3% in Q1.
Lastly, the Melbourne Institute revised down its forecast for Australia’s Q1 GDP growth to 0.4% from 0.5% previously.
Assuming quarterly population growth of 0.7%, as suggested by the monthly labour force survey, this implies a decline in Australia’s per capita GDP of 0.3%.
Australia narrowly emerged from the longest per capita recession in recorded history (seven quarters) in Q4 2024.
The above data suggests that the release of the Q1 2025 national accounts next week will indicate that Australians have fallen back into recession.
