Economists remain confident of a positive growth result in this week’s national accounts that would signal the end of the recession.
But Treasurer Josh Frydenberg is reluctant to back such optimism.
Economists’ forecasts centre on a 2.4 per cent growth expansion in the September quarter following two quarters of contraction, notably a seven per cent collapse in the June quarter as a result of the COVID-19 pandemic.
But Mr Frydenberg isn’t prepared to jump the gun ahead of Wednesday’s national accounts.
“I’m not Nostradamus … the numbers will be what they are,” the treasurer told ABC radio on Monday.
He said capital expenditure and construction numbers for the quarter released last week show “these areas continue to be challenging”.
Both results were weaker than economists has expected.
But he later told parliament there were two million fewer Australian workers on the JobKeeper wage subsidy in October compared to September and 450,000 fewer businesses on the scheme.
“That is a sign that Australia’s economic recovery is well under way and momentum is building,” he said.
New Australian Bureau of Statistics business figures on Monday showed company gross operating profits grew by 3.2 per cent in the September quarter, building on the 15.8 per cent jump in the three previous months.
“Stimulus measures are still supporting strong growth in earnings,” ANZ senior economist Felicity Emmett said.
Business inventories – stock on shelves and in warehouses – fell 0.5 per cent, but are expected to add 0.9 percentage points to growth in the quarter because the rate of decline was smaller than the previous quarter.
But separately, monthly Reserve Bank credit data showed loans to business declined 0.3 per cent in October to an annual rate of 1.4 per cent, a seven-year low.
“While the economic outlook has broadly improved, Aussie firms remain reluctant to invest, spend and take on more loans,” Commonwealth Securities senior economist Ryan Felsman said.
“Political tensions with China are adding to the uncertainty, despite supportive federal government policy initiatives announced in the October budget.”
Shadow treasurer Jim Chalmers said a positive growth result would be welcome but not surprising after the easing of restrictions around the country.
“What looks like a recovery on paper will still feel like a recession for many Australians,” he told reporters in Canberra.
“The Morrison government and Josh Frydenberg shouldn’t be congratulating themselves while unemployment queues are still lengthening.”
Economists will finalise their growth predictions on Tuesday when international trade and government spending data for the quarter are released.
The Reserve Bank figures also showed total credit was flat for a third straight month in October, to be just 1.8 per cent higher on the year.
That is the lowest annual rate since February 2010 and the aftermath of the global financial crisis.
Mortgages for owner-occupiers and investors rose by just 0.3 per cent in October, to leave the annual rate at 3.3 per cent, while personal loans fell 0.7 per cent to minus 12.7 per cent.