CANBERRA: Australia is heading for only its fourth quarter of shrinking GDP over the past 25 years according to big US investment bank Morgan Stanley. Unexpectedly weak quarterly construction figures – the sharpest decline in 16 years – has firmed Morgan Stanley’s view that the economy shrank by 0.3 per cent in the September quarter.
The consensus view from market economists is for 0.5 per cent growth, although the construction data – and in particular the big slide in private residential building – is causing a spate of downward revisions to forecasts. Morgan Stanley’s Daniel Blake said, while dynamics are not in place for a technical recession (two consecutive quarters of negative GDP), the economy going backwards in the September would challenge the “trend growth” consensus and likely see further weakness for the Australian dollar ahead.
