A few snippets from around the place;
Data here:
Shane Oliver, AMP
- While recent data does point to an acceleration in March-quarter GDP growth, there have been numerous growth spikes in Australia to around 1 percent, quarter-on-quarter, in recent years only to be followed by a cooling again
- Uncertainty remains around the outlook for consumer spending: Household debt is high, banks are tightening lending standards, wage growth and inflation remain low and will pick up only gradually, and house prices are falling
BIS Oxford Economics
- With jobs growth slowing sharply, wage rises still tracking inflation (resulting in no real wage gains for the average worker), and house price falls reducing households' net worth we expect spending momentum to remain subdued through the rest of this year
Barclays:
- RBA not in a rush to raise rates
- We expect them to maintain their glass half full narrative
Westpac:
Real GDP grew by 3.1% over the past year ... against the backdrop of stronger global growth, which accelerated in 2017 to the fastest pace since 2011.
March quarter 1.0% increase in output in part represents a rebound from an understated 0.5% rise in Q4.
March quarter, key growth drivers
- public demand and exports (Exports are trending higher as new capacity in the resource sector comes on stream and as services increase in response to strong demand from the Asian region) (Public demand, which is around 25% of the economy, is increasing at a brisk pace .... Public investment is trending higher and spending on health care is on the rise.)
- positive contributions from housing and inventories
- consumer spending disappointing
business investment (while up only 0.1% in Q1) turned the corner in 2017, up 6%, following four years of decline
- mining investment drag is greatly diminished
- non-mining investment is in an upswing, led by construction, as the capital stock expands to meet the needs of a growing population
Q1 accounts highlights some key positives, which will continue to support activity in 2018
- notably public demand
- exports
- business investment
However, the national accounts while comprehensive are a little dated.
- Some recently developments have been less encouraging. Importantly, jobs growth has slowed (although forward indicators remain positive) which will dampen wage income growth
- Also, some key negatives remain, notably in the housing sector, which is cooling as lending conditions tighten. House prices continue to pull-back from their highs and home building activity, while up in Q1 is likely to decline during 2019, down from historic highs. Also, as noted, a question mark remains around the consumer as wages growth remains weak, debt levels high and as house prices ease back from their highs.
