Visually striking, but very much backward looking. Aus real GDP contracts q/q.


Households saving their pennies, reducing expenditure, but really, just unable to spend on services, previously a very large share of wallet.


As evidenced by the enormous saving ratio.


Normally, GDP matters a lot, to our thinking, even though it comes through at a lag.

However, in COVID time, it might as well be last century. The economy is growing ex-lockdowns, but there is a fragility to the growth, coming as it does largely through the housing market, with positive spill overs to retail and construction.

We remain negative on Australian shares, at the DAA level, given this fragility, but note that Omicron, and whether it causes Australia to revisit lockdowns, is what will dominate economic performance in the near term.

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