Australian Q3 GDP preview
11:32 December 02 2022
Share article
Economy In transition, robust growth for now, ahead of sharp slowdown in 2023. Q3 GDP forecast: 0.8%qtr, 6.4%yr
Read full report
The Australian National Accounts, to be released on Wednesday December 7, will provide an estimate of economic activity for the September quarter.
Over the second half of this year, the economy is in a period of transition. While overall growth is likely to be relatively robust for the September quarter, a sharp slowdown is in prospect for 2023 as high inflation and rising interest rates impact. There is already some evidence of the adverse impacts of these powerful headwinds - notably weak retail sales.
We expect output growth of 0.8% for the quarter, lifting annual growth to 6.4%. The level of activity will be 6.4% above that at the end of 2019 (prior to the pandemic).
Activity in the period will be supported by the tailwinds of earlier policy stimulus and the reopening effect from the delta lockdowns of 2021. That said, the reopening effect is fading, having been most powerful over the first half of 2022, when consumer spending expanded at a 9% annualised pace led by services (travel and hospitality).
The arithmetic of our 0.8% forecast for Q3 is: +0.9% for domestic demand and a net -0.1ppt impact from net exports (-0.5ppts) and inventories (+0.4ppts).
We anticipate that: consumer spending grew by 1.0% (led by services and vehicles); home building was flat (including a pull-back in renovation work); business investment rose by a forecast 1.3% (construction work rebounding and outweighing a dip in equipment spending; and public demand likely returned to growth, a forecast 0.8%.
The Labour Force survey reported muted employment and hours worked gains in the quarter (0.3% and 0.2%) crimped by elevated sick leave (covid impacts) and elevated holiday leave.
Information and colour around the household sector will be of interest.
The household saving ratio spiked to an extremely elevated 19.8% in the September quarter 2021, associated with the delta lockdowns. Subsequently it moderated to 8.7% in the June quarter 2022, freeing up funds to finance additional spending. That is still above the equilibrium saving ratio of around 6% and is thus supportive of future spending - as is the war chest of $265bb in “excess” savings amassed during the pandemic.
National income growth eased in the September quarter after a period of rapid growth associated with the terms of trade climbing to a record high mid-year. Global commodity prices have pulled back on global recession fears. The terms of trade declined by about 6% in the September quarter, we estimate - which will hit mining profits. Nominal GDP growth is expected to be a little above 1% for the quarter, with annual growth to lift to over 13½%.
Click on PDF link above for full report
20
{"topicSelector":[{"tagId":"westpaciq:topics/australia","name":"australia","description":"","title":"Australia","url":"/topic.australia"},{"tagId":"westpaciq:topics/aud","name":"aud","description":"","title":"AUD","url":"/topic.aud"},{"tagId":"westpaciq:topics/interestrates","name":"interestrates","description":"","title":"Interest rates","url":"/topic.interestrates"},{"tagId":"westpaciq:topics/newzealand","name":"newzealand","description":"","title":"New Zealand","url":"/topic.newzealand"},{"tagId":"westpaciq:topics/usd","name":"usd","description":"","title":"USD","url":"/topic.usd"},{"tagId":"westpaciq:topics/nzd","name":"nzd","description":"","title":"NZD","url":"/topic.nzd"},{"tagId":"westpaciq:topics/inflation","name":"inflation","description":"","title":"Inflation","url":"/topic.inflation"},{"tagId":"westpaciq:topics/rates","name":"rates","description":"","title":"Rates","url":"/topic.rates"},{"tagId":"westpaciq:topics/rba","name":"rba","description":"","title":"RBA","url":"/topic.rba"},{"tagId":"westpaciq:topics/credit","name":"credit","description":"","title":"Credit","url":"/topic.credit"},{"tagId":"westpaciq:topics/acgb","name":"acgb","description":"","title":"ACGB","url":"/topic.acgb"},{"tagId":"westpaciq:topics/us","name":"us","description":"","title":"US","url":"/topic.us"},{"tagId":"westpaciq:topics/yieldcurve","name":"yieldcurve","description":"","title":"Yield curve","url":"/topic.yieldcurve"},{"tagId":"westpaciq:topics/forecasts","name":"forecasts","description":"","title":"Forecasts","url":"/topic.forecasts"},{"tagId":"westpaciq:topics/commodities","name":"commodities","description":"","title":"Commodities","url":"/topic.commodities"},{"tagId":"westpaciq:topics/basis","name":"basis","description":"","title":"Basis","url":"/topic.basis"},{"tagId":"westpaciq:topics/ustreasury","name":"ustreasury","description":"","title":"US Treasury UST","url":"/topic.ustreasury"},{"tagId":"westpaciq:topics/semigovernment","name":"semigovernment","description":"","title":"Semi government","url":"/topic.semigovernment"},{"tagId":"westpaciq:topics/rbnz","name":"rbnz","description":"","title":"RBNZ","url":"/topic.rbnz"},{"tagId":"westpaciq:topics/europe","name":"europe","description":"","title":"Europe","url":"/topic.europe"},{"tagId":"westpaciq:topics/abs","name":"abs","description":"","title":"ABS","url":"/topic.abs"},{"tagId":"westpaciq:topics/fx","name":"fx","description":"","title":"FX","url":"/topic.fx"},{"tagId":"westpaciq:topics/jpy","name":"jpy","title":"JPY","url":"/topic.jpy"},{"tagId":"westpaciq:topics/uk","name":"uk","description":"","title":"UK","url":"/topic.uk"},{"tagId":"westpaciq:topics/housing","name":"housing","description":"","title":"Housing","url":"/topic.housing"},{"tagId":"westpaciq:topics/fomc","name":"fomc","description":"","title":"Federal Reserve FOMC","url":"/topic.fomc"},{"tagId":"westpaciq:topics/ois","name":"ois","description":"","title":"OIS","url":"/topic.ois"},{"tagId":"westpaciq:topics/nz","name":"nz","description":"","title":"NZ","url":"/topic.nz"},{"tagId":"westpaciq:topics/whatspricedin","name":"whatspricedin","description":"","title":"What\u0027s priced in","url":"/topic.whatspricedin"},{"tagId":"westpaciq:topics/podcast","name":"podcast","description":"","title":"Podcast","url":"/topic.podcast"},{"tagId":"westpaciq:topics/crossmarket","name":"crossmarket","description":"","title":"Cross market","url":"/topic.crossmarket"},{"tagId":"westpaciq:topics/eur","name":"eur","description":"","title":"EUR","url":"/topic.eur"},{"tagId":"westpaciq:topics/consumer","name":"consumer","description":"","title":"Consumer","url":"/topic.consumer"},{"tagId":"westpaciq:topics/crosscurrencyxccy","name":"crosscurrencyxccy","description":"","title":"Cross currency XCCY","url":"/topic.crosscurrencyxccy"},{"tagId":"westpaciq:topics/china","name":"china","description":"","title":"China","url":"/topic.china"},{"tagId":"westpaciq:topics/bbsw","name":"bbsw","description":"","title":"BBSW","url":"/topic.bbsw"},{"tagId":"westpaciq:topics/morningreport","name":"morningreport","description":"","title":"Morning Report","url":"/topic.morningreport"},{"tagId":"westpaciq:topics/gbp","name":"gbp","description":"","title":"GBP","url":"/topic.gbp"},{"tagId":"westpaciq:topics/macro","name":"macro","description":"","title":"Macro","url":"/topic.macro"},{"tagId":"westpaciq:topics/retail","name":"retail","description":"","title":"Retail","url":"/topic.retail"},{"tagId":"westpaciq:topics/bonds","name":"bonds","description":"","title":"Bonds","url":"/topic.bonds"},{"tagId":"westpaciq:topics/chartpacks","name":"chartpacks","description":"","title":"Chart packs","url":"/topic.chartpacks"},{"tagId":"westpaciq:topics/ecb","name":"ecb","description":"","title":"European central bank ECB","url":"/topic.ecb"},{"tagId":"westpaciq:topics/employment","name":"employment","description":"","title":"Employment","url":"/topic.employment"},{"tagId":"westpaciq:topics/consumersentiment","name":"consumersentiment","description":"","title":"Consumer Sentiment","url":"/topic.consumersentiment"},{"tagId":"westpaciq:topics/ironore","name":"ironore","description":"","title":"Iron ore","url":"/topic.ironore"},{"tagId":"westpaciq:topics/labour","name":"labour","description":"","title":"Labour","url":"/topic.labour"},{"tagId":"westpaciq:topics/cliffnotes","name":"cliffnotes","description":"","title":"Cliff notes","url":"/topic.cliffnotes"},{"tagId":"westpaciq:topics/houseprices","name":"houseprices","description":"","title":"House prices","url":"/topic.houseprices"},{"tagId":"westpaciq:topics/construction","name":"construction","description":"","title":"Construction","url":"/topic.construction"},{"tagId":"westpaciq:topics/gdp","name":"gdp","description":"","title":"GDP","url":"/topic.gdp"},{"tagId":"westpaciq:topics/japan","name":"japan","description":"","title":"Japan","url":"/topic.japan"},{"tagId":"westpaciq:topics/boj","name":"boj","description":"","title":"BOJ","url":"/topic.boj"},{"tagId":"westpaciq:topics/businessconditions","name":"businessconditions","description":"","title":"Business conditions","url":"/topic.businessconditions"},{"tagId":"westpaciq:topics/securitisation","name":"securitisation","description":"","title":"Securitisation","url":"/topic.securitisation"},{"tagId":"westpaciq:topics/cmbs","name":"cmbs","description":"","title":"CMBS","url":"/topic.cmbs"},{"tagId":"westpaciq:topics/canada","name":"canada","description":"","title":"Canada","url":"/topic.canada"},{"tagId":"westpaciq:topics/rmbs","name":"rmbs","description":"","title":"RMBS","url":"/topic.rmbs"},{"tagId":"westpaciq:topics/cny","name":"cny","description":"","title":"CNY","url":"/topic.cny"},{"tagId":"westpaciq:topics/trade","name":"trade","description":"","title":"Trade","url":"/topic.trade"},{"tagId":"westpaciq:topics/currencies","name":"currencies","description":"","title":"Currencies","url":"/topic.currencies"},{"tagId":"westpaciq:topics/property","name":"property","description":"","title":"Property","url":"/topic.property"},{"tagId":"westpaciq:topics/wages","name":"wages","description":"","title":"Wages","url":"/topic.wages"},{"tagId":"westpaciq:topics/cardtracker","name":"cardtracker","description":"","title":"Card Tracker","url":"/topic.cardtracker"},{"tagId":"westpaciq:topics/oil","name":"oil","title":"Oil","url":"/topic.oil"},{"tagId":"westpaciq:topics/cad","name":"cad","description":"","title":"CAD","url":"/topic.cad"},{"tagId":"westpaciq:topics/dairy","name":"dairy","description":"","title":"Dairy","url":"/topic.dairy"},{"tagId":"westpaciq:topics/westpacwrap","name":"westpacwrap","description":"","title":"Westpac Wrap","url":"/topic.westpacwrap"},{"tagId":"westpaciq:topics/antipodeandaily","name":"antipodeandaily","description":"","title":"Antipodean Daily","url":"/topic.antipodeandaily"},{"tagId":"westpaciq:topics/agriculture","name":"agriculture","description":"","title":"Agriculture","url":"/topic.agriculture"},{"tagId":"westpaciq:topics/pboc","name":"pboc","description":"","title":"PBOC","url":"/topic.pboc"},{"tagId":"westpaciq:topics/confidence","name":"confidence","description":"","title":"Confidence","url":"/topic.confidence"},{"tagId":"westpaciq:topics/marketoutlook","name":"marketoutlook","description":"","title":"Market Outlook","url":"/topic.marketoutlook"},{"tagId":"westpaciq:topics/federalbudget","name":"federalbudget","description":"","title":"Federal Budget","url":"/topic.federalbudget"},{"tagId":"westpaciq:topics/boe","name":"boe","description":"","title":"BOE","url":"/topic.boe"},{"tagId":"westpaciq:topics/fiscalpolicy","name":"fiscalpolicy","description":"","title":"Fiscal policy","url":"/topic.fiscalpolicy"},{"tagId":"westpaciq:topics/data","name":"data","description":"","title":"Data","url":"/topic.data"},{"tagId":"westpaciq:topics/coal","name":"coal","description":"","title":"Coal","url":"/topic.coal"},{"tagId":"westpaciq:topics/lng","name":"lng","description":"","title":"LNG","url":"/topic.lng"},{"tagId":"westpaciq:topics/dwellingapprovals","name":"dwellingapprovals","description":"","title":"Dwelling approvals","url":"/topic.dwellingapprovals"},{"tagId":"westpaciq:topics/leadingindex","name":"leadingindex","description":"","title":"Leading Index","url":"/topic.leadingindex"},{"tagId":"westpaciq:topics/economiccalendar","name":"economiccalendar","description":"","title":"Economic Calendar","url":"/topic.economiccalendar"},{"tagId":"westpaciq:topics/asia","name":"asia","description":"","title":"Asia","url":"/topic.asia"},{"tagId":"westpaciq:topics/population","name":"population","description":"","title":"Population","url":"/topic.population"},{"tagId":"westpaciq:topics/carbonpricing","name":"carbonpricing","description":"","title":"Carbon pricing","url":"/topic.carbonpricing"},{"tagId":"westpaciq:topics/esg","name":"esg","description":"","title":"ESG","url":"/topic.esg"},{"tagId":"westpaciq:topics/metals","name":"metals","description":"","title":"Metals","url":"/topic.metals"},{"tagId":"westpaciq:topics/steel","name":"steel","description":"","title":"Steel","url":"/topic.steel"},{"tagId":"westpaciq:topics/fairvalue","name":"fairvalue","description":"","title":"Fair value","url":"/topic.fairvalue"},{"tagId":"westpaciq:topics/billevans","name":"billevans","description":"","title":"Bill Evans","url":"/topic.billevans"},{"tagId":"westpaciq:topics/energy","name":"energy","description":"","title":"Energy","url":"/topic.energy"},{"tagId":"westpaciq:topics/manufacturing","name":"manufacturing","description":"","title":"Manufacturing","url":"/topic.manufacturing"},{"tagId":"westpaciq:topics/pacific","name":"pacific","description":"","title":"Pacific","url":"/topic.pacific"},{"tagId":"westpaciq:topics/datax","name":"datax","description":"","title":"DataX","url":"/topic.datax"},{"tagId":"westpaciq:topics/nsw","name":"nsw","description":"","title":"NSW","url":"/topic.nsw"},{"tagId":"westpaciq:topics/png","name":"png","description":"Papua New Guinea","title":"PNG","url":"/topic.png"},{"tagId":"westpaciq:topics/ssa","name":"ssa","description":"","title":"SSA","url":"/topic.ssa"},{"tagId":"westpaciq:topics/model","name":"model","description":"","title":"Model","url":"/topic.model"},{"tagId":"westpaciq:topics/luciellis","name":"luciellis","description":"","title":"Luci Ellis","url":"/topic.luciellis"},{"tagId":"westpaciq:topics/vic","name":"vic","description":"","title":"VIC","url":"/topic.vic"},{"tagId":"westpaciq:topics/sa","name":"sa","description":"","title":"SA","url":"/topic.sa"},{"tagId":"westpaciq:topics/gold","name":"gold","description":"","title":"Gold","url":"/topic.gold"},{"tagId":"westpaciq:topics/government","name":"government","description":"","title":"Government","url":"/topic.government"},{"tagId":"westpaciq:topics/aluminium","name":"aluminium","description":"","title":"Aluminium","url":"/topic.aluminium"},{"tagId":"westpaciq:topics/qld","name":"qld","description":"","title":"QLD","url":"/topic.qld"},{"tagId":"westpaciq:topics/wa","name":"wa","description":"","title":"WA","url":"/topic.wa"},{"tagId":"westpaciq:topics/nzconsumerconfidence","name":"nzconsumerconfidence","description":"","title":"NZ consumer confidence","url":"/topic.nzconsumerconfidence"},{"tagId":"westpaciq:topics/redbook","name":"redbook","description":"","title":"Red Book","url":"/topic.redbook"},{"tagId":"westpaciq:topics/tas","name":"tas","description":"","title":"TAS","url":"/topic.tas"},{"tagId":"westpaciq:topics/G10","name":"G10","description":"","title":"G10","url":"/topic.G10"},{"tagId":"westpaciq:topics/tax","name":"tax","description":"","title":"Tax","url":"/topic.tax"},{"tagId":"westpaciq:topics/mining","name":"mining","description":"","title":"Mining","url":"/topic.mining"},{"tagId":"westpaciq:topics/election","name":"election","description":"","title":"Election","url":"/topic.election"},{"tagId":"westpaciq:topics/payments","name":"payments","description":"","title":"Payments","url":"/topic.payments"},{"tagId":"westpaciq:topics/tourism","name":"tourism","description":"","title":"Tourism","url":"/topic.tourism"},{"tagId":"westpaciq:topics/nzindustryinsights","name":"nzindustryinsights","description":"","title":"NZ Industry Insights","url":"/topic.nzindustryinsights"},{"tagId":"westpaciq:topics/nzregions","name":"nzregions","description":"","title":"NZ Regions","url":"/topic.nzregions"},{"tagId":"westpaciq:topics/nzagriupdate","name":"nzagriupdate","description":"","title":"NZ Agri Update","url":"/topic.nzagriupdate"},{"tagId":"westpaciq:topics/quarterlybusinesssnapshot","name":"quarterlybusinesssnapshot","description":"","title":"Quarterly Business Snapshot","url":"/topic.quarterlybusinesssnapshot"},{"tagId":"westpaciq:topics/traderecommendation","name":"traderecommendation","description":"","title":"Trade recommendation","url":"/topic.traderecommendation"},{"tagId":"westpaciq:topics/swaption","name":"swaption","description":"","title":"Swaption","url":"/topic.swaption"},{"tagId":"westpaciq:topics/fiji","name":"fiji","description":"","title":"Fiji","url":"/topic.fiji"},{"tagId":"westpaciq:topics/swapspread","name":"swapspread","description":"","title":"Swap spread","url":"/topic.swapspread"},{"tagId":"westpaciq:topics/sustainablefinance","name":"sustainablefinance","description":"","title":"Sustainable finance","url":"/topic.sustainablefinance"},{"tagId":"westpaciq:topics/renewables","name":"renewables","description":"","title":"Renewables","url":"/topic.renewables"},{"tagId":"westpaciq:topics/aofm","name":"aofm","description":"","title":"AOFM","url":"/topic.aofm"},{"tagId":"westpaciq:topics/climatechange","name":"climatechange","description":"","title":"Climate change","url":"/topic.climatechange"},{"tagId":"westpaciq:topics/payrolls","name":"payrolls","description":"","title":"Payrolls","url":"/topic.payrolls"},{"tagId":"westpaciq:topics/infrastructure","name":"infrastructure","description":"","title":"Infrastructure","url":"/topic.infrastructure"},{"tagId":"westpaciq:topics/nzhometruths","name":"nzhometruths","description":"","title":"NZ Home Truths","url":"/topic.nzhometruths"},{"tagId":"westpaciq:topics/supplychain","name":"supplychain","description":"","title":"Supply chain","url":"/topic.supplychain"},{"tagId":"westpaciq:topics/semifactsheet","name":"semifactsheet","description":"","title":"Semi factsheet ","url":"/topic.semifactsheet"},{"tagId":"westpaciq:topics/horticulture","name":"horticulture","description":"","title":"Horticulture ","url":"/topic.horticulture"},{"tagId":"westpaciq:topics/boc","name":"boc","description":"","title":"BOC","url":"/topic.boc"},{"tagId":"westpaciq:topics/qeo","name":"qeo","description":"","title":"QEO","url":"/topic.qeo"},{"tagId":"westpaciq:topics/technology","name":"technology","description":"","title":"Technology","url":"/topic.technology"},{"tagId":"westpaciq:topics/meat","name":"meat","description":"","title":"Meat","url":"/topic.meat"},{"tagId":"westpaciq:topics/forestry","name":"forestry","description":"","title":"Forestry","url":"/topic.forestry"},{"tagId":"westpaciq:topics/digitisation","name":"digitisation","description":"","title":"Digitisation ","url":"/topic.digitisation"},{"tagId":"westpaciq:topics/socialfinance","name":"socialfinance","description":"","title":"Social finance","url":"/topic.socialfinance"},{"tagId":"westpaciq:topics/financialservices","name":"financialservices","description":"","title":"Financial services","url":"/topic.financialservices"},{"tagId":"westpaciq:topics/bobs","name":"bobs","description":"","title":"BoBs","url":"/topic.bobs"},{"tagId":"westpaciq:topics/coasttocoast","name":"coasttocoast","description":"","title":"Coast to coast","url":"/topic.coasttocoast"},{"tagId":"westpaciq:topics/inflationlinked","name":"inflationlinked","description":"","title":"Inflation-Linked","url":"/topic.inflationlinked"},{"tagId":"westpaciq:topics/sustainabilitylinkedloans","name":"sustainabilitylinkedloans","description":"","title":"Sustainability linked loans","url":"/topic.sustainabilitylinkedloans"},{"tagId":"westpaciq:topics/india","name":"india","description":"","title":"India","url":"/topic.india"},{"tagId":"westpaciq:topics/resources","name":"resources","description":"","title":"Resources","url":"/topic.resources"},{"tagId":"westpaciq:topics/transport","name":"transport","description":"","title":"Transport","url":"/topic.transport"},{"tagId":"westpaciq:topics/greenbonds","name":"greenbonds","description":"","title":"Green bonds","url":"/topic.greenbonds"}]}
Browse topics
Show more tags
