A recap of Australian Capex data this morning (date here and here), courtesy of Westpac.
Total new capital expenditure rose by 3.6% q/q in the September quarter
- Down 0.7% y/y
- Stronger-than-expected buildings and structures work, +6.3% q/q and +3.9% y/y (foreshadowed in the ‘construction work done’ release yesterday)
- Equipment investment was -1.5% q/q and -8.8% y/y
- Mining activity +4.0%, services +3.1% and manufacturing +2.5%
2013/14 capex expectations saw a notable improvement in estimate 4
- The improvement is principally due to buildings and structures expectations, but Equipment expectations also improved, albeit more modestly from –15.1% in estimate 3 to –9.7% in estimate 4.
Westpac’s proprietary model of 2013/14 expectations:
- Specifically, in 2013/14: mining investment is expected to decline by 4.1% (–6.1% previously)
- Manufacturing investment is to fall by 10.0% (–11.7% previously);
- Services investment is to increase by 4.0% (previously flat).
- Overall, a 1.6% decline is anticipated compared to a 4.2% decline three months ago
- These modest improvements should be set in the context of the unusually weak August print, partly due to high uncertainty around the election.
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In summary, this survey has, as would be expected, shown a modest improvement relative to the August survey which was conducted at a time of high uncertainty. The modest improvement in the non-mining investment plans is still a disappointing result given the strong boost to business confidence following the election outcome.
