Australia: Positive news for Q4 growth – Westpac

The Business Indicators survey provides an update on business inventories and a partial update on incomes. Inventories were largely as expected, while incomes were a little more resilient than anticipated, economists at Westpac Institutional Bank brief.

Key quotes

“Inventories edged higher in the final quarter of 2019, increasing by 0.3%. That result, along with a slight revision to the Q3 outcom (from a -0.4% to a -0.2%), will see inventories add 0.16ppts to growth in the December quarter. That broadly met our expectations (a forecast +0.1ppt).”

“Profits fell sharply, which was to be expected, down by 3.5% (market median -1.3% and Westpac -4.2%). Mining profits took a hit as commodity prices moderated from recent highs.”

“Wage incomes grew by 1.0% in the quarter, a fraction above our priors (a forecast 0.9%).”