Australia's CAPEX: 2nd estimate for 2017/18 higher-than-expected

Australian capex (private capital expenditure) for Q1 shows a capex 'headline' of +0.3% q/q vs 0.8% expected and -1% last (revised from -2.1%). The 2nd estimate for 2017/18 investment expectations came at 85$ bn, which is a strong result. The first estimate of 2017/18 capex plans stood at 80.6bn. As per Q1 building capex, it came at +0.7% q/q, while Q1 plant an machinery was -0.1% q/q. Lastly, the 2016/17 6th estimate is currently projected at 112.6$ bn.

KEY POINTS

ACTUAL EXPENDITURE (VOLUME TERMS)

• The trend volume estimate for total new capital expenditure fell by 0.6% in the March quarter 2017 while the seasonally adjusted estimate rose by 0.3%.
• The trend volume estimate for buildings and structures fell by 0.2% in the March quarter 2017 while the seasonally adjusted estimate rose by 0.7%.
• The trend volume estimate for equipment, plant and machinery fell by 1.0% in the March quarter 2017 while the seasonally adjusted estimate fell by 0.1%.

EXPECTED EXPENDITURE (CURRENT PRICE TERMS)

• This issue includes the sixth estimate (Estimate 6) for 2016-17 and the second estimate (Estimate 2) for 2017-18.
• Estimate 6 for 2016-17 is $112,629m. This is 11.4% lower than Estimate 6 for 2015-16. Estimate 6 is 0.8% higher than Estimate 5 for 2016-17.
• Estimate 2 for 2017-18 is $85,436m. This is 6.4% lower than Estimate 2 for 2016-17. Estimate 2 is 5.2% higher than Estimate 1 for 2017-18.
• See pages 7-10 for further commentary on expectations data.