The headline is expected at +2% q/q, prior was +3%
- Tax incentives should give the number for 'plant and equipment a boost.
Also in the release is the sixth estimate for capex in 2020/21.
- upgrades for both mining and non-mining intentions are expected
The second estimate for 2021/22 investment plans should also show an upgrade
Preview, this via Wesptac (in brief)
- The recovery in equipment spending appears to have extended into 2021... Businesses are optimistic, activity is rebounding briskly and tax incentives are generous.
- On the construction side, the risk is that the downtrend resumes ... tracking softer commencements.
- With the economy rebounding more quickly than anticipated, 2020/21 capex plans have recovered somewhat and prospects are for capex to lift in 2021/22. Further upgrades are likely in this survey
- Guessing what businesses will guess for Est 2 of 2021/21 is challenging. Potentially, Est 2 will be in the order of ... 10% upgrade on Est 1
And, via ANZ:
- expect Australian private new capital expenditure to have risen 3% q/q
- We think firms will upgrade their planned capex to $126bn in 2020-21 (from $121bn) and to $114bn in 2021-22 (from $105bn). Both would represent larger than usual upgrades for this time of year, driven by the rapid improvement in the consumer and business sectors on top of fiscal incentives
- There is upside risk to these expectations if firms upgrade their capex plans more quickly, given the strong demand outlook and the rise in profits through 2020
- There is also downside risk if some businesses are yet to firm up their capex plans, given the unexpectedly rapid economic recovery, or if some remain hesitant to make large investment commitments, particularly given the slower-than-expected vaccine rollout and ongoing risk of outbreaks and restrictions
While the data is a focus its unlikely to be too impactful on spot AUD, global developments are more important right now than local data for forex movement. The NZD is an exception, the RBNZ yesterday have provided support for the Kiwi $ even as the USD flexed elsewhere.
