Australian GDP ‘partial’ (construction work) data due today

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Q2 Construction figures are due at 0130 GMT:

  • expected 2.5% q/q, prior 2.4%

As posted earlier:

  • data will be an input into the economic growth numbers (GDP for Q2 is due on September 1). Construction has been a big beneficiary of the fiscal (and monetary) support outlaid in response to the pandemic and the associated restrictions imposed. Housing, public works (infrastructure) leading the way. 

Says NAB, accurately:

  • Q2 data clearly precedes the most recent virus developments and will be accordingly be seen as very dated and unlikely to be market moving

And warn:

  • A miss to construction (or Capex tomorrow) could raise the risks of a negative Q2 GDP print with NAB pencilling a meagre Q2 GDP print of just 0.2% q/q

Q3 GDP will certainly be a negative given the persistent lockdowns in Australia’s two largest cities, and if NAB’s warning of the potential for a negative Q2 comes to be then Australia will have been in a recession. The commonly accepted definition of a recession is two consecutive quarters of negative GDP. Plenty of folks do not like this definition, but as I say, its the commonly accepted definition. 

On the other hand (and this is where the “but…” in the headline to the post comes in) if Q2 shows healthy growth (again, September 1 the data is due) then it’ll be a positive as it’ll show the economy in good shape going into a negative Q3, for what that’s worth at least. 

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