Having seen construction work completed jump on Wednesday, the latest of Australia’s GDP inputs arrives this morning with the release of business capital expenditure (CAPEX) figures for the June quarter.
Here’s the state of play.
- The most important part of today’s release will be the third estimate of 2015/16 expected expenditure, followed by the equipment, plant and machinery spending figure.
- The second estimate for the 2015/16 financial year was $104.033 billion, down a massive 24.6% on the second estimate for 2014/15.
- It was 2.1% above the downwardly-revised $102.571 billion first estimate for 2015/16.
- In the history of the survey, the third estimate has never been less than the second estimate, only higher. The average increase has been 9.77%.
- Markets, along with the RBA, will be watching the breakdown of the third estimate closely.
- The second estimate for 2015/16 mining sector expenditure fell to $52.192 billion. This was lower than the $53.82 billion first estimate and 56.2% below the second estimate for 2012/13.
- Estimates for non-mining sectors also fell compared to those of a year earlier.
- To allay fears of a steeper-than-expected slowdown in Australian economic growth, a reasonable increase in the estimate for non-mining expenditure will be required in the third estimate.
- For the June quarter, business capex is expected to fall 2.5% following a 4.4% decline in Q1.
- Equipment, plant and machinery spending, a direct GDP input, is expected to contract by 1% following a 0.5% drop in the March quarter.
Business Insider will have full coverage of the CAPEX report once it is released at 11.30am AEST.