The 0.3 per cent rise in Australia’s GDP in the March 2017 quarter follows growth of 1.1 per cent in December 2016 quarter and a contraction of 0.4 per cent in the September quarter.
A note by NAB Group Economics said the “modest” growth in the March quarter was in line with market expectations, but stronger than NAB’s forecast of a slight fall.
“The year-ended pace of growth eased to 1.7 per cent year-on-year, the weakest rate since 2009 in the aftermath of the global financial crisis,” said NAB.
A number of ‘one-off’ events contributed to softness in the March quarter and the September 2016 quarter, including weather-related disruptions to exports and dwelling construction, said NAB.
NAB also pointed to an encouraging “albeit small” lift in business investment for the quarter (0.7 per cent quarter-on-quarter).
“This suggests that the worst of the drag from the mining investment ‘cliff’ is behind us, and implies a rise in non-mining investment this quarter,” said NAB.
“This is occurring in tandem with an encouraging lift in non-mining profitability as indicated in Monday’s business indicators release, and strength in NAB’s measure of business conditions.
“If this trend becomes more well entrenched, it will give greater confidence in our (and others’) expectations of a moderate cyclical upswing in non-mining investment in 2018 and 2019.”
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