Westpac's "forecast for Q4 GDP has been...>

AUSTRALIA: Westpac's "forecast for Q4 GDP has been downgraded, to 0.2%qtr,

2.4%yr (prev. 0.5%qtr, 2.7%yr). Construction activity fell by 3.1% in the

quarter, a material downside surprise, as revealed in the Construction Work

survey yesterday. For 2018/19, the capex survey is relatively positive around

investment by the service sectors. This is not a great surprise, with strength

in transport (spill-overs from the upswing in public infrastructure) & strength

in utilities (as investment in renewables increases sharply). Mining investment

in 2018/19 is likely to be below that in 2017/18, with construction of the major

gas projects finalised recently. Turning to 2019/20, we caution that estimates 1

& 2 for any given year can be an unreliable guide to actual spending. This is

particularly true for equipment spending - for which decisions/variations can be

made with relatively short notice. Estimate 1 for 2019/20 is $92bn, which is 11%

above Est 1 a year ago. This headline figure, Est 1 on Est 1, appears to be

quite positive. However, we assess that this figure is flattered by base

effects. We interpret the Est 1 reading as describing a much less upbeat outlook

than suggested by the headline figure."