Next month’s economic growth figures for the September quarter are seen as ancient history by some economists given there are already signs of a smart recovery from the impact of the NSW and Victoria’s COVID-19 lockdowns.
Even so, the national accounts – which provides a comprehensive guide to the state of the nation – will show the extent of the damage inflicted from the Delta variant and whether growth forecasts for the year can still be made.
Treasury secretary Steven Kennedy told senators last month he expects the economy contracted by around three per cent in the September quarter as a result of having half the population in lockdown.
If correct, it would represent the second largest contraction in growth in the history of the national accounts – the record being seven per cent in the June quarter of last year and during the nation’s first recession in nearly 30 years.
Some economists believe the September contraction could be closer to four per cent.
Economists will hone their forecasts as a spread of quarterly figures are released over the next week or so and ahead of the issue of the national accounts on December 1.
What is known so far is that retail spending fell 4.4 per cent in the September quarter, the largest quarterly decline on record.
Wednesday will see the Australian Bureau of Statistics release construction work completed during the quarter.
Economists’ forecast point to a three per cent decline for the September quarter, although predictions range from a six per cent drop to a modest 0.5 per cent rise.
On Thursday, the ABS will release private sector capital expenditure for the quarter. The report also contains future business investment intentions.
Forecasts here centre on a 2.5 per cent decline, with expectations ranging from a five per cent decline to a one per cent increase.
“Given the reopening it will all be a bit dated,” AMP Capital chief economist Shane Oliver said.
“The focus should really be business investment plans which are likely to show a further lift as businesses were surveyed around the time of reopening and given that business confidence held up reasonably well through the lockdowns.”
Quarterly data for company profits, business inventories, international trade and government spending will be issued early next week.
Separately, the ABS will release more up to date weekly payroll jobs figures for the fortnight ending October 30, which will capture the unwinding of restrictions in NSW, Victoria and the ACT.
The week ends with retail spending for October on Friday which are forecast to show a solid two per cent increase.
Meanwhile, Australian shares look set for a weak start to the week as global share markets remain under the grip on inflation concerns and the potential impact on economies and corporate profits.
On Wall Street, the S&P 500 fell 6.58 points to 4,697.96 and the Dow Jones Industrial Average slid 268.97 points to 35,601.98. However, the Nasdaq added 63.73 points to 16,057.44, for its sixth straight gain.
“A renewed wave of COVID cases (in Europe) could ease current red-hot global concern over inflation and interest rates, which might end up being somewhat supportive of equity markets, especially growth-orientated sectors such as technology,” BetaShares chief economist David Bassanese said.
Australian share futures fell 45 points to 7351 in sympathy with the general lower trend on Wall Street..
The Australian benchmark S&P/ASX200 index closed up 17.3 points, or 0.23 per cent, to 7396.5 points on Friday.