Report Published: March 2017
Real GDP grew by 1.1% last quarter (seasonally adjusted) to be 2.4% higher through-the-year (December 2016 quarter over December 2015 quarter). The strong December quarter is a welcome outcome but we should not get carried away. Indeed, the non-mining economy continues to suffer from weak growth in demand. Hence the current weakness of employment and dismal investment intentions. Meanwhile, private consumption expenditure, which grew by 0.9% in December (adding 0.5% to GDP), is forecast to return to more sustainable growth rates of between 0.5 to 0.7% per quarter over the next two years. This will moderate quarterly GDP growth.
Furthermore, don’t forget mining construction has further to fall. We are less than two thirds of the way through a 74% fall in mining construction. That’s our estimate. However, the new Reserve Bank Governor Philip Lowe has said that we’re 90% through the fall from the peak in mining investment. We are less concerned with equipment investment as most of it is imported and don’t make a difference to GDP growth. We focus on construction. Our estimate is that mining construction has fallen by 45% so far and will fall by another 42% over the next two years.
Meanwhile, we will be navigating cyclical swings in different parts of the economy. The residential building cycle will turn down. The negatives from falling dwellings building and mining construction will be partially offset by continued recovery and growth in infrastructure spending. The economy will remain soft until NMBI (non-mining business investment) comes through as a primary driver of growth. The latest capex figures confirm that’s not happening in the short-term. And the real question for NMBI is when and how strongly NMBI comes through.
As we go through the next few years, we’ll be watching profits, sales and capacity utilisation. It will take another three years before non-mining business investment builds momentum sufficiently to drive growth. Our forecast is for GDP growth to average 2.5% and employment growth to average around 1% p.a. over the next three years but with significant differences across states, regions and capital cities.
Topics in this month’s Bulletin:
- Growth will stay soft for some years
- Trumponomics: A ‘trial and error’ presidency imposing global risk
- Investment and Construction outlook
- Profits rebound in the December quarter, but strength is unsustainable
- Outlook for the states
- The crisis in energy markets, and the potential impact on Australian manufacturing
- Short and long term dynamics of the motor vehicle and fuel markets
- Tourism contribution to GDP, retail sales and other sectors
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Adobe PDF document files for download by subscribers.
EO BULLETIN MARCH 2017 (pdf, 965 KB)
EO CHARTBOOK MARCH 2017 (pdf, 1.57 MB)
EO BULLETIN FEBRUARY 2017 (pdf, 1.35 MB)
EO BULLETIN DECEMBER 2016/JANUARY 2017 (pdf, 1.16 MB)
EO BULLETIN NOVEMBER 2016 (pdf, 663 KB)
EO BULLETIN OCTOBER 2016 (pdf, 684 KB)
EO BULLETIN SEPT 2016 (pdf, 758 KB)
EO CHARTBOOK SEPT 2016 (pdf, 1.80 MB)
EO BULLETIN AUGUST 2016 (pdf, 1.53 MB)
EO BULLETIN JUNE-JULY 2016 (pdf, 1.11 MB)
EO BULLETIN MAY 2016 (pdf, 834 KB)
EO BULLETIN APRIL 2016 (pdf, 776 KB)
Microsoft Excel spreadsheets and PDF files for download by online subscribers.
EXCHANGE RATES – WEEKLY (xls, 2.35 MB)
INTEREST RATES – WEEKLY (xls, 2.13 MB)
STOCK PRICES – WEEKLY (xls, 5.78 MB)
COMMODITY PRICES – WEEKLY (xls, 1.90 MB)
CALENDAR OF RELEASES AND EVENTS (pdf, 19 KB)
LATEST DATA AND FORECASTS
Microsoft Excel spreadsheets and PDF documents for download by online subscribers.
STATE INDICATORS UPDATED 13.03.2017 (xls, 1001 KB)
COSTS & PRICES UPDATED 13.03.2017 (xls, 536 KB)
EXTERNAL SECTOR UPDATED 13.03.2017 (xls, 1.07 MB)
FINANCIAL INDICATORS UPDATED 13.03.2017 (xls, 1.77 MB)
BUSINESS INDICATORS UPDATED 13.03.2017 (xls, 799 KB)
ECONOMIC INDICATORS UPDATED 13.03.2017 (xls, 1.60 MB)
PDF document files for download by online subscribers.
MARCH 2017 – GROWTH WILL STAY SOFT FOR SOME YEARS YET (pdf, 213 KB)
MARCH 2017 – TRUMPONOMICS. A 'TRIAL AND ERROR' PRESIDENCY IMPOSING GLOBAL RISK (pdf, 156 KB)
MARCH 2017 – INVESTMENT AND CONSTRUCTION OUTLOOK.PDF (pdf, 136 KB)
MARCH 2017 – PROFITS REBOUND IN DECEMBER QUARTER, BUT STRENGTH IS UNSUSTAINABLE (pdf, 251 KB)
FEB 2017 – LATEST DATA CONFIRMING DECEMBER QUARTER REBOUND IN ECONOMIC GROWTH (pdf, 575 KB)
FEB 2017 – UNDERLYING INFLATION NEAR ITS LOW POINT, BUT EXPECTED TO SLOWLY RISE OVER NEXT 2 YEARS (pdf, 69 KB)
FEB 2017 – SEA CHANGE IN DRIVERS OF INVESTMENT RETURNS (pdf, 134 KB)
FEB 2017 – NET EXPORTS BOOSTING GDP, WHILE DRAMATICALLY REDUCING THE CURRENT ACCOUNT DEFICIT (pdf, 319 KB)
DEC 2016/ JAN 2017 – ECONOMY SLIPS IN THE DECEMBER QUARTER BUT NO CHANCE OF RECESSION (pdf, 99 KB)
DEC 2016/JAN 2017 – RISING US INTEREST RATES TO IMPROVE AUSTRALIAN COMPETITIVENESS (pdf, 45 KB)
DEC 2016/JAN 2017 – STATE OF PLAY - JOBS AND RETAIL SPENDING IMPROVE, MOTOR VEHICLE SALES WEAKENING (pdf, 36 KB)
DEC 2016/JAN 2017 – INVESTMENT AND CONSTRUCTION TO DECLINE NEXT 2 YEARS, BUT DIFFERENCES BETWEEN SECTORS (pdf, 129 KB)
DEC 2016/JAN 2017 – PROFITS ANALYSIS AND INDUSTRY OUTLOOK TO 2017/18 (pdf, 88 KB)
NOV 2016 – TRUMP PRESIDENCY AND WHAT IT MEANS FOR AUSTRALIA (pdf, 53 KB)
NOV 2016 – RETAIL TRADE ANALYSIS (pdf, 78 KB)
NOV 2016 – EDUCATION SERVICES EXPORTS (pdf, 40 KB)
NOV 2016 – OUTLOOK FOR EMPLOYMENT BY INDUSTRY SECTOR (pdf, 172 KB)
OCT 2016 – STATE OF PLAY (pdf, 52 KB)
OCT 2016 – INFLATION RISES BUT REMAINS LOW. IS DEFLATION A RISK? (pdf, 33 KB)
OCT 2016 – COMMODITY PRICES ARE RECOVERING – SUSTAINABLE RALLY OR A FALSE DAWN? (pdf, 71 KB)
OCT 2016 – OUTLOOK FOR STATES (pdf, 201 KB)
SEPT 2016 – ECONOMIC OVERVIEW – PRIVATE DEMAND IS STILL SUFFERING FROM POST GFC WEAKNESS. (pdf, 124 KB)
SEPT 2016 – DETAILED GDP, INCOME, EXPENDITURE AND INVESTMENT FORECASTS (pdf, 118 KB)
SEPT 2016 – PROFITS AND INDUSTRY ANALYSIS; CONSTRUCTION AND INVESTMENT OUTLOOK (pdf, 272 KB)
SEPT 2016 – STATE OF PLAY (pdf, 131 KB)
SEPT 2016 – GROWING PART-TIME EMPLOYMENT MEANS CHANGES TO PRODUCTIVITY MEASURE.PDF (pdf, 190 KB)
AUG 2016 – STATE OF PLAY (pdf, 450 KB)
AUG 2016 – WITH PRICE AND WAGE INFLATION LOW, WILL THE RBA CUT RATES AGAIN? (pdf, 436 KB)
AUG 2016 – AN UPDATE ON THE INTERNATIONAL ECONOMY (pdf, 813 KB)
AUG 2016 – IMPACTS OF THE CAR MANUFACTURING SHUTDOWN (pdf, 572 KB)
JUNE/JULY 2016 – GDP GROWTH OF 3 PER CENT UNSUSTAINABLE BEYOND THE NEAR TERM (pdf, 107 KB)
JUNE/JULY 2016 – CONSTRUCTION AND INVESTMENT OUTLOOK (pdf, 284 KB)
JUNE/JULY 2016 – NON MINING BUSINESS INVESTMENT ON A SLOW ROAD TO RECOVERY (pdf, 118 KB)
JUNE/JULY 2016 – FALLOUT FROM THE UK’S DECISION TO LEAVE THE EUROPEAN UNION (pdf, 336 KB)
MAY 2016 – STATE OF PLAY (pdf, 51 KB)
MAY 2016 – INTEREST RATE AND EXCHANGE RATE OUTLOOK (pdf, 134 KB)
MAY 2016 – INFLATION OUTLOOK (pdf, 112 KB)
MAY 2016 – BUDGET WRAP (pdf, 215 KB)
APRIL 2016 – STATE OF PLAY (pdf, 51 KB)
APRIL 2016 – TOURISM CONTRIBUTION TO GDP AND EMPLOYMENT (pdf, 142 KB)
APRIL 2016 – OUTLOOK FOR STATES (pdf, 246 KB)
Microsoft Powerpoint, Excel and Adobe PDF document files for download by online subscribers.
EO BULLETIN MARCH 2017 (pdf, 965 KB)
EO CHARTBOOK MARCH 2017 (pdf, 1.57 MB)
EO CONFERENCE SLIDES MARCH 2017 – OVERVIEW (ppt, 930 KB)
EO CONFERENCE SLIDES MARCH 2017 – GLOBAL, COMMODITIES & TRADE OUTLOOK (ppt, 2.93 MB)
EO CONFERENCE SLIDES MARCH 2017 – ENGINEERING & CONSTRUCTION OUTLOOK (ppt, 1.03 MB)
EO CONFERENCE SLIDES MARCH 2017 – PROFITS, INVESTMENT, STATES (ppt, 976 KB)