“It drives home the point that the peak in resource investment and capital expenditure will occur later this year, and perhaps we are already seeing preliminary signs of that,” JPMorgan economist Tom Kennedy said.
Although the Australian economy expanded for the 22nd consecutive year, the growth rate over the last two year has been extremely low. According to Commonwealth Bank senior economist Michael Workman, the GDP data has revealed that the transition to non-resources-led growth was still fairly hesitant and slow.
“Annual growth running at 2.5 per cent is well below the trend outcomes that could be occurring of about 3.15 per cent,” he said.
“When we take away the net export contribution of about 1 per cent in the quarter, the domestic economy was clearly negative,” he said.