Australia Freight Transport and Shipping Report Q4 2017
While growth will be positive in the rail and road freight sectors in 2017, air will experience afairly large contraction, although this mode will return to positive growth in 2018. Our negative forecastfor Q117 reaffirms our broadly negative view of the Australian economy. This is partially due to poorweather having affected exports, together with continuing weakness in residential construction activity andpoor external demand due to the slowdown in China. These factors will likely keep Australia's growthsubdued over the coming quarters.
Key Updates And Forecasts
Australia's Q117 real GDP growth weakened significantly to 1.1% q-o-q in seasonally adjustedannualised (SAA) terms, from 4.5% in the previous quarter. While part of the slowdown can be attributedto the disruption in economic activity due to bad weather (prior to Tropical Cyclone Debbie hitting thecountry from March 28 to early April), which has also adversely affected freight operations, we aremaintaining our negative outlook on the country's economic performance over the coming quarters. In yo-y terms, real GDP growth slowed to 1.7% y-o-y in Q117 from 2.4% in the previous quarter and we aremaintaining our real GDP growth forecasts at 2.1% in 2017 and 2.2% in 2018 (versus 2.5% in 2016). Webelieve that the combination of weakness in residential construction activity and poor external demanddue to the slowdown in China will keep overall growth subdued, despite support from public investment.
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