Annual GDP growth has moderated from 3.7% in 2012 Q2 to 2.6% currently, up from 2.5% in 2013 Q1.

  • Domestic demand expanded by just 0.3% in the quarter, 0.6% on the year
  • Consumer spending is soft (increased by 0.4% in Q2 and by 1.8% over the year)
  • Business investment is declining (mining investment peaking while non-mining sectors are not picking up to a great extent). Business investment fell by 1.2% in Q2

Housing construction disappointed recorded a dip in activity in Q2:

  • Dwelling investment 0.6% decline.
  • New fell by 2.1%
  • 1.9% rebound in renovation work

Soft labour market;

  • Hours worked rose in Q2, up 0.4%, but by only 0.8% y/y
  • Consumer spending up by 0.4% in Q2 and by 1.8% over the year
  • The household saving ratio ticked higher in Q2 to 10.8% from 10.5% prior
  • Government demand was up 1.2%
  • Net exports were neutral in the quarter:
  • Resource exports up 1.2% q/q, 10.3% y/y
  • Inventories added 0.2ppts to growth in Q2

–

With thanks to Westpac for the recap