Australian capex data due today - preview
A snippet from Westpac's what to expect from the data:
expects that Q4 private business capex will fall 1.8%
- Underlying this, we anticipate a -2.2% for buildings and structures, with downside risks given the sharp declines in approvals and commencements. We expect a -1.5% for equipment - with risks lying in both directions.
- Businesses are upbeat, uncertainty has decreased and supply lines have improved - however, for most, excess capacity remains.
We will also receive the latest update of capex plans, which will include Est 5 for 2020/21, as well as Est 1 for 2021/22 (with the initial estimate often unreliable).
- We are looking for Est 1 to print at $94bn, and an Est 5 of $119bn is arguably plausible - that's a 3% upgrade on Est 4 and some -9% vs Est 5 a year ago.
The 'twin' headlines are the Q4 capex and Estimate 5. The Australian dollar is surrent;ly in the grip of global development so whier the data today may give us a wobble in the AUD rate the focus will very quickly shift back to the global reflation trade.
Also, as I note previously, the data today is from an expanded survey that now includes education and health capex. This will confuse interpretation somewhat.