Q1 GDP Coming Up, Growth Moderation Expected

Today Q1 GDP prints and is expected to rise by 0.3% q/q and 2.4% y/y after 0.5% and 2.7% in Q4. There is some upside risk to these forecasts from Tuesday’s estimate for the net export contribution which was -0.2pp compared with forecasts of -0.5pp.

• Analysts are expecting GDP to rise between 0.1% (Morgan Stanley) and 0.6% q/q (Goldman Sachs). Of the local banks, NAB is forecasting 0.2% q/q, Westpac 0.3% and NAB & ANZ 0.4%.
• Of the data released, Q1 retail volumes fell 0.6% q/q. The national accounts will give us the first glimpse of how services spending fared. Q1 construction rose a better-than-expected 1.8% q/q and private capex +2.4% q/q. Inventories rose 1.2% q/q and so are likely to make a positive contribution, while net exports should detract 0.2pp.
• This release also includes Q1 productivity and unit labour cost data and there is likely to be a lot of focus on these outcomes given recent RBA comments. It noted in its June meeting statement that “unit labour costs are also rising briskly, with productivity growth remaining subdued”.