What to Watch - Q4
Australian Q4 GDP was released, expect to see a 0.7% increase, for 2.5%yoy. We revised our forecast lower after the weak investment data over the past few days, while early next week we will get inventories, profits, public spending and net exports. For net exports we expect a healthy 0.7 pps contribution to GDP, with the current account deficit narrowing to $9.8bn from $12.7bn in Q3. Plenty of monthly data released next week. On the housing front, RP Data house prices are expected to be little changed in February, while building approvals are expected to rise 5% in January after the 3% fall in December. Retail sales are also in focus this week. The NAB’s Online Retail Index is released while the ABS retail sales data are out and we expect a more modest 0.3% gain in January after the solid increases over the past five months.
NAB's Manufacturing Activity Index – Q3 2013
The NAB’s quarterly Manufacturing Index was unchanged at 0.3 points in Q3, suggesting the manufacturing sector should record quarterly output growth of around 0.4% in the September quarter. The gains in business confidence have been a positive influence on the Index, but it has been mostly offset by negative trends in labour costs, purchase costs and final product prices. The lower AUD since Q1 has seen a rise in purchase costs, which is expected to push the Manufacturing Index lower over the next six months.