The data is here .. a poor ‘headline result, but stronger details: Australia Q1 Private Capital Expenditure: -4.2%
Some analyst responses so far:
ANZ
- Non-mining capex upgraded modestly – points to a gradual upswing in non-mining business investment in 2014-15
- The decline in mining investment has been well flagged, is broadly in line with RBA expectations
- Says it estimates that total capex is likely to fall 5.8% in 2014/15, which is very at the -5.8% Treasury forecast
- Non-mining investment intentions continue to point to only a very gradual increase in non-mining investment, which continues to support our view that the RBA is likely to keep rates on hold for an extended period of time
Commonwealth Bank currency strategist Joseph Capurso:
- 2014-15 capex plans “well above” expectations
- The on-mining part of business investment provided most of the upside surprise
- The data suggests the transition of the Australian economy from mining investment to non-mining investment is happening very smoothly, better than the RBA would have expected
- A bearish headline print
- But the internals of the report were all strong
- Equipment, plant and machinery spend, a direct GDP input, rising 2.8% on quarter, something that will contribute to economic growth when GDP is released next week
- A somewhat surprising outcome, mining investment intentions were 7.8% higher than 1st estimate