Australia Q2 GDP likely to register 0.7 pct q/q, 2.8 pct y/y; non-mining investment seen solid: ANZ Research

Australia’s gross domestic product (GDP) for the second quarter of this year is expected to have risen a solid 0.7 percent q/q, following a rise of 1.0 percent in Q1. This would see annual growth edge down to 2.8 percent, although annualised H1 growth would be a strong 3.5 percent, according to the latest report from ANZ Research.

In tomorrow’s report, the focus is likely once again to be on the household indicators – consumption and wages. Strong growth in retail sales volumes (1.2 percent) suggest a solid outcome for Q2 consumer spending although keep in mind that retail spending accounts for only around 30 percent of consumption.

Weakness in car sales and some services is likely to provide some offset to the retail strength. On wages, the GDP measure of average wages will be closely watched. Preliminary data suggest that this is likely to show ongoing modest acceleration, consistent with the broad sweep of wages indicators.

"The investment numbers will also be closely watched given their importance in the current upswing. While the capex survey suggested mining investment fell sharply, we expect to see another solid rise in non-mining investment," the report commented.