Jul-Sep 2014 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Jul-Sep 2014 (2^nd preliminary est) was revised downward from the 1^st preliminary estimate (-1.6% q/q annualized, -0.4% q/q) to -1.9% q/q annualized (-0.5% q/q). All of the major forecasting institutions with the exception of DIR had been expecting an upward revision with the market consensus at -0.5% q/q annualized (DIR revised downwards to -1.7% q/q annualized), bringing a downward revision with an especially negative tone.

◆In terms of source of demand, the downward revision from the 1^st preliminary estimate saw capex revised downwards in response to corporate statistics to -0.4% q/q (-0.2% q/q), helping to push the overall GDP figure downwards. Corporate statistics had reported capex as having a firm undertone and hence an upward revision of GDP was foreseen according to market consensus. Even so, the figure was revised downward, bringing an especially negative tone to this period’s results. Private sector inventories had been almost unanimously expecting an upward revision in response to corporate statistics, but remained unchanged (contribution to GDP in q/q terms: -0.6%pt on 1^st preliminary, -0.6%pt on 2^nd preliminary).