What is really exciting about the GDP number released earlier today is not only that at 4.6% quarter on quarter it was better than the market expected, but that the nature of the recovery is broad-based.
We knew from the monthly manufacturing and mining numbers that the first quarter GDP number for these sectors would be strong, which is indeed the cease. Interestingly, the trade sector moved quite sharply into positive territory, which points to a recovery in consumer spending. Both the financial and transport sectors strengthened further, while agriculture – after several quarters of decline – also bounced back.
The overall level of GDP is now within a whisker of the high point we reached in September 2008, which would have seemed a very unlikely outcome this time last year. Most analysts are likely to be revising their forecast numbers upwards and an overall growth number of 3.5% for the year now seems like a realistic rather than an optimistic expectation.
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