Saul Eslake gives four points to consider on the weak GDP number..

Tom McKay

Saul Eslake gives four points to consider on the weak GDP number... 1) The transition from growth led by resources investment to growth led by a combination of resources, exports and other components of domestic demand is going fairly slowly. 2) While we are seeing big increases in house prices, and we've seen some increase in building approvals too for units in Sydney, overall, dwelling construction is pretty soft. 3) The higher house prices are not evidently boosting private consumption expenditure in part because households are choosing not to monetise the increase in the value of their dwellings by borrowing against them. 4) So household spending growth is being constrained in line with what is relatively weak growth in disposable income.


Tom McKay

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