Aussie GDP data is out.

Held up by the consumer, and in general, a world that is short of commodities, which we sell by the bucketload.

Our view is that the commodities story is set to change, which would take away this key pillar of support.

Quarterly real GDP looks strong enough…

…and indeed the nominal aggregates are quite strong, given inflation, by headline and composition.

That said, using the nominal aggregates, as a % of GDP (to look at the proportions over time) we can see housing is subtracting over a full pp from the relatively recent past.

I think that contribution goes quite a bit lower, likely down to 2-3% of GDP, which is and of itself is a “recession equivalent” change, if not offset by anything else.

The real GDP data (in other words, by output, keeping prices constant) by composition also highlights the marked weakness in investment, overall.

There’s a somewhat cynical categorisation of the Australian economy, namely “housing and holes”, meaning dwellings and resources. But, it is quite apt.

We remain underweight Aussie shares given our concerns over the consumer, household leverage, and rising rates.

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