Responses to the Australian capital expenditure data are coming in
I posted earlier on the data and the AUD response:
- Australia Q4 capex headline: -0.2% q/q (expected +1.0%)
- AUD chipping away at the bids, lower after capex data
- AUD chipping away at the bids ... still
This now via Westpac, in summary, bolding mine:
December quarter Private business capex spending slipped
- led lower by the mining sector
- fell short of expectations
By asset,
- Equipment 2.2%, exceeding our forecast of 1.0%.
- Building & structures declined by 2.1%, weaker than our expected +0.6%
By industry:
- mining -4.7%;
- services +1.7%;
- and manufacturing +2.6%.
The mining investment wind-down resumed following some resilience over recent quarters
Investment across the non-mining economy moved higher, with a focus on construction.
Our forecast for Q4 GDP has been rounded down to 0.5%qtr, 2.5%yr, moderated from a 0.6%qtr.
2017/18 capex plans Est 5
- 2.5% above Est 5 a year ago
- a slight upgrade on Est 4, which was 1.6% above Est 4 a year ago
- The upward revision was concentrated in mining
For the 2017/18 year, mining capex will decline by around 8%, -$3.4bn.
- This is more than offset by an 8%, +$6.2bn, rise in non-mining capex
2018/19 capex plan Est 1
- 3.5% above Est 1 a year ago
- This is the first positive Est 1 on Est 1 comparison since 2012/13
- Mining capex is down
- lift in non-mining
In short, the survey confirms that business investment turned the corner in 2017/18 and will move higher in 2018/19, with a focus on construction activity consistent with the strong upswing in non-residential building approvals