Good news on the economic front with the release of the latest round of Private New Capital Expenditure data from the ABS.
While the market had expected Capex to fall 1.5% over the quarter it actually rose 0.2% seasonally adjusted.
The key here is the “Capex Cliff” the economy is facing is getting smaller as each estimate of investment plans for the 2014/15 financial year come in.
The ABS siad that, “Estimate 4 for 2014-15 is $153,210m. This is 7.5% lower than Estimate 4 for 2013-14. Estimate 4 is 2.2% higher than Estimate 3 for 2014-15.”
The uptick, however slight, in estimates for this financial year is good news for the economy and even though Capex only picks up around 60% of total capital expenditure due to some industries being omitted this is a positive for next week’s Q3 GDP print.
The Aussie dollar rose 25 points on the news to 0.8560.