Australia Q2 GDP Growth Matches Estimetes

The Australian economy advanced a seasonally adjusted 0.5 percent in the June quarter of 2019, the same pace as an upwardly revised figure in the previous period and in line with market expectations. Positive contribution from net exports and a faster rise in government spending on the back of a subdued household consumption offset a slump in dwelling investment.
ABS l Rida Husna | 9/4/2019 9:46:58 AM
Government spending rose 2.7 percent in the second quarter (vs 0.9 percent in Q1), led by national defence (2 percent), national non-defense (3 percent), national government consumption (2.8 percent) and state and local government consumption (2.5 percent). 

Household consumption grew by 0.4 percent (vs 0.3 percent in Q1), mainly supported by rises in spending for hotels, cafes and restaurants (0.9 percent), recreation and culture (0.5 percent), and insurance and other financial services (0.4 percent).

Gross fixed capital formation shrank 1.7 percent, after contracting 1 percent in the first three months of the year, as private investment dropped further (-1.6 percent vs -1.3 percent) driven by steeper falls in non-dwelling construction (-5.9 percent vs 0.7 percent) and dwellings (-4.4 percent vs -2.2 percent). Also, public investment went down 2.3 percent (vs 0.1 percent in Q1), dragged down by state and local general government (-4.1 percent vs 1.9 percent).

Total inventories dropped AUD 1,982 million following a rise of AUD 559 million in the prior period, driven by a run down in public authorities, wholesale trade and retail trade inventories.

Exports of goods and services advanced 1.4 percent (vs 1.9 percent in Q1), boosted by sales of goods (1.7 percent), of which non-rural goods (4.0 percent), particularly other mineral fuels (10.9 percent), which was partially offset by rural goods (-4.3 percent). Sales of services  rose 0.4 percent, led by travel services (1.7 percent). Imports of goods and services fell 1.3 percent (vs -0.2 percent in Q4), mainly weighed down by lower purchases of consumption goods (-2.9 percent), intermediate (-1.4 percent) and capital goods (-0.5 percent). Imports of services declined 0.9 percent, mainly due to travel services (-1.0 percent).

On the production side, output increased further in mining (3.4 percent vs 1.1 percent); information media and telecommunications (1.2 percent vs 0.8 percent); and health care and social assistance (1.5 percent vs 1.2 percent). Meanwhile, growth slowed in financial and insurance services (0.2 percent vs 1 percent); professional, scientific and technical services (1.5 percent vs 2.1 percent); and administrative and support services (0.8 percent vs 2.3 percent). Additionally, output contracted in agriculture, forestry and fishing (-2.1 percent vs 0.3 percent in Q1); manufacturing (-1.4 percent vs 0.1 percent); electricity, gas, water and waste services (-0.3 percent vs 0.6 percent); wholesale trade (-1.4 percent vs 1 percent); and transport, postal and warehousing (-0.3 percent vs flat reading). Also, the construction sector shrank 1.4 percent, faster than a 0.9 percent contraction in the prior period.  

Through the year to the second quarter, the economy advanced by 1.4 percent, the weakest growth rate since the Global Financial Crisis, after a downwardly revised 1.7 percent expansion in the March quarter.

Australia Q2 GDP Growth Matches Estimetes