Australia: Economic activity accelerates in Q1
June 3, 2015
In the first quarter, GDP grew a seasonally-adjusted 0.9% over the previous quarter, which was above both the 0.5% expansion tallied in Q4 and the 0.7% expansion analysts had expected. The result marked the highest rate of growth in four quarters. On an annual basis, GDP growth eased, moderating from a 2.4% expansion in Q4 2014 to a 2.3% increase in Q1.
Q4’s quarterly acceleration was driven mainly by a build up in inventories. The main detractor was a deterioration in fixed capital formation. On the domestic front, demand fell from 0.5% in Q4 to a flat reading in Q1. The deceleration was driven by a fall in fixed investment of 1.2%, contrasting last quarter’s reading of a 0.3% increase. Private consumption growth fell from a 0.8% increase in Q4 to a 0.5% rise in Q1, although government consumption grew 0.4% (Q4: -0.1% quarter-on-quarter).
On the external front, export growth observed a sharp increase from 1.6% in Q4 to 5.0% in Q1, which marked the largest expansion since Q3 2000. Imports also saw a drastic increase, rebounding from a 1.6% contraction to a 3.1% increase in Q1, coming in at the largest increase in 14 quarters. The resulting contribution of the external sector came in a 0.5%, (Q4: +0.7% qoq).
Author: Robert Hill, Economist