Australia: Q4 Capex rose a solid 2% - ANZ

Felicity Emmett, senior economist at ANZ, notes that the Australian Q4 Capex rose a solid 2% q/q with machinery & equipment spending rising a modest 0.7% and (in contrast to yesterday’s very weak construction work done numbers) private non-residential construction rose a strong 3.2%.

Key Quotes

“In even better news, the outlook remains strong. Non-mining firms now plan to increase investment by 8.5% in the current financial year, a little stronger than the 6.7% expected in the Q3 release.”

“For 2019-20 non-mining firms plan to increase investment another 6.6%. While these estimates are pretty rubbery at this early stage of the cycle, the positive tone suggests that businesses remain relatively upbeat about the outlook.”

“The mining sector also continues to be upbeat. While plans for 2019-20 were downgraded, mining firms expect to increase spending in 2019-20 by a strong 21%.”

“The RBA is likely to be relieved with the upgrade to investment plans.”