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Australian GDP Q3: Momentum builds as upswing broadens

We expect the September quarter National Accounts to show Australia’s recovery gathered momentum, with the economy expanding 0.8% over Q3 and 2.3%yr in year-ended terms – a touch above the RBA’s updated trend estimate of +2.0%yr but broadly consistent with Westpac Economics’ estimate of trend.

Read full report 'Australian GDP Q3 preview: Momentum builds as upswing broadens'

Australia’s recovery gathered momentum with the economy expanding 0.8% over Q3 and 2.3%yr in year-ended terms, consistent with the estimate produced by Westpac-Now.

Domestic demand is expected to have grown a very strong 1.5%qtr and 2.9%yr in Q3 – the sharpest quarterly gain since the March quarter 2012 – as the upswing becomes more synchronised across key sectors of the economy.  

Growth will moderate over the next few quarters as the impact of lumpy capex spends (related to aircraft) unwinds, but gains will remain solid. We estimate that the underlying growth rate (ex-lumpy capex) was around 0.6%qtr in Q3. 

Productivity is expected to rebound and grow 0.9%yr. This could see growth in nominal unit labour costs run at around 2.5% in six-month annualised terms – an encouraging signal for the RBA.   

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