The pace of growth is expected to have slowed in late 2011, economists say.
AMP Capital chief economist Shane Oliver said he was expecting a slowing in the pace of economic growth for the final three months of calendar 2011 after two previous quarters of strong growth.
“After a couple of quarters of recovery from the 2010/11 floods, it looks like the Australian economy has lost momentum again,” Dr Oliver said.
“Retail sales have been virtually stalled for the last couple of months, housing construction is very weak, tourism is struggling, manufacturers are struggling and the jobs market is starting to deteriorate again.”
The national accounts to be released by the Australian Bureau of Statistics (ABS) on Wednesday are expected to show that gross domestic product (GDP) grew by 0.7 per cent in the December quarter, according to an AAP survey of 17 economists.
The economists forecast GDP growth through 2011 at 2.3 per cent.
September quarter GDP posted a strong 1.0 per cent rise, and June quarter economic growth was at 1.4 per cent, previous ABS figures showed.
Business investment in the mining sector was the main driver for the strong growth in the middle of 2011.
ICAP senior economist Adam Carr said the expected slowing of pace in the December quarter was nothing to worry about.
He said the Australian economy was hitting a patch of volatility.
“We have had extraordinary growth and expect extraordinary growth to continue,” Mr Carr said.
“After very, very strong growth in the third quarter, the indicators are telling us to expect that we should have a slight correction in the fourth quarter.”
Capital expenditure, spending on things like plant and equipment and buildings, took a backward step in the December quarter with 0.3 per cent fall, and were likely to be a drag on Wednesday’s GDP figures.
This compared with a 14.6 per cent rise in September quarter.
CMC Markets chief market strategist Michael McCarthy said he revised down his GDP forecast after the weak December quarter capital expenditure numbers reported on March 1 by the ABS.
“What we’re talking about is the fourth quarter of last year and sentiment at that time was very weak,” Mr McCarthy said.
“The results that we’re expecting there will reflect that weak sentiment environment.
“We also saw cost blowouts, we saw price deflation, we saw a moderation of commodity prices”
“All of those factors will feed in to what we see as the weakest quarter of the year,” Mr McCarthy said.
