Survey of the Private New Capital Expenditure and Expected Expenditure (March quarter of 2017) due from Australia at 0130GMT

This via CBA. I've summarised and shifted around the formatting, any bolding is mine. The parts in italics are the CBA , non-italics are my explainers.


  • As usual, we note that the capex survey only captures around 60% of business investment as per the national accounts. The survey excludes a number of large and important industries which include agriculture, health and education.

There are three key figures:

  • (i) QI 2017 actual spending
  • (ii) 2016/17 expectations (6th estimate)
  • and (iii) 2017/18 expectations (2nd estimate)

Markets will focus on the forward looking expenditure plans, particularly the second cut of 2017/18 spending intentions.

(i.e. CBA saying point 3 is the key focus)

In summary on these 3 points:

  • (i) Our forecast is for the actual volume of QI capex to fall by 1.5% which would leave annual growth 12% lower
  • (ii) We expect the sixth estimate of 2016/17 spending plans to come in near $113bn.
  • (iii) A second estimate of 2017/18 spending plans of around $85bn would imply no change to investment intentions compared to the first estimate

More detail (if you wish)

On point (i) Q1 2017 actual

  • We expect the actual volume of Q1 capex to decline by 1.5%.
  • Such an outcome would leave annual growth 12.0% lower.
  • The actual spending data will help us to firm our estimates of Q1 GDP growth.
  • At this stage a soft print is likely


On point (ii) the 6th estimate for 2016/2017 investment intentions

  • The last reading from three months ago implied an 11% fall in nominal capex this financial year. The detail suggested a fall in mining capex of 31% and a modest but respectable 3% increase in non-mining investment.
  • The historical experience suggests that in the sixth estimate we need to see a slight downgrade to mining capex plans and a small upgrade to non-mining capex plans relative to the fifth estimate for spending intentions to remain broadly unchanged.
  • We consider a sixth estimate that comes in larger than $113bn as an upgrade on the fifth estimate. Less than $113bn is a downgrade.


On point (iii) the 2nd estimate for 2017/18 investment expectations

  • The first estimate of 2017/18 capex plans came in at $80.6bn. The figuring implied a fall in mining capex of around 28% when compared with 2015/16 and a broadly flat non-mining outcome.
  • Second estimates for spending plans can vary significantly from actual spending. A comparison of previous second estimates with actuals shows that non-mining firms will almost always underestimate their capex plans at both their first and second stabs. But the magnitude of the miss can vary greatly in any given year.
  • We consider a second estimate that comes in larger than $85bn as an upgrade on the first estimate. Less than $85bn would imply a downgrade (see Table 1). Policymakers will be looking, in particular, for a lift in non-mining spending intentions in 2017/18 (more than $56bn). We are yet to see a meaningful lift in non-mining private capex.

CBA finish with a quick outline of risk to their views for the data:


  • The improvement in the NAB Business Survey coupled with strong employment reports over the past two months suggest the risk to our call on 2017/18 non-mining investment plans is to the upside.
  • Risks to our mining call look evenly balanced.