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The odds of Australia recording another negative quarter of economic growth have increased following the release of construction data from the ABS earlier today, say economists at the National Australia Bank.

Yes, after recording a shock 0.5% contraction in the September quarter last year, there’s now an increased risk that a similar scenario could arrive when Australia’s March quarter GDP report is released in early June.

Tapas Strickland, an economist at the NAB, explains (our emphasis in bold):

The private sector components from this release imply a 0.2% detraction from Q1 GDP growth, slightly weaker than what NAB had expected. More encouragingly, the public sector components were stronger, but these do not automatically translate into GDP with the Statistician incorporating additional government spending figures to be released the week after next. NAB’s models point to Q1 GDP growth of 0.4% quarter-on-quarter, but today’s data suggests the risk is to the downside with a real risk of a flat or even a small negative outcome.

A “real risk”.

It sounds ominous, bringing back memories of similar statements that were seen in the lead-up to the release of September’s GDP report.

While the NAB is still forecasting real quarterly GDP growth of 0.4%, given weakness in retail sales and construction during the quarter, it does raise questions whether similar soft outcomes — some weather-related — could be seen in other GDP inputs.

Markets will receive further information on that front next week with the release of private capital expenditure figures for the quarter. That will be followed by net exports, company profits, balance of payments and government spending figures in the following week.

Australia’s Q1 GDP report will be released on Wednesday, June 7.