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26 Feb 2015
Australian capex declines below expectations – TDS
FXStreet (Barcelona) - The TD Securities Team reviews the Australian capex data release, noting that ‘plant and equipment’ which feeds into the GDP decline 1.3%, and further predicting the mining capex to fall -21%.
Key Quotes
“Q4 Private Capex was down –2.2% over the quarter vs expectations for a –1.6% decline. Q3 capex was revised upwards from 0.2% to 0.6%, but it was today’s 5th estimate for 2014/15 and the 1st estimate of capex intentions for 2015/16 that revealed a slowing in the non mining / services sector of the economy.”
“Actual services capex in Q4 rose only +1.4% on the quarter, well below the run rate seen last year (Q1 +3.8%, Q2 +4.4% and Q3 +6.6%) while services capex is forecast to decline –7% over 2015/16, vs TD’s forecast for a +9% rise.”
“Although there is significant volatility associated with the first estimate, today’s number suggests that the much awaited recovery in services to fill the void to be left by mining is unlikely to materialise anytime shortly.”
“Mining sector capex is expected to fall -21%, close to the -25% decline we had forecast while manufacturing intentions drop -21% but this is of less concern given how small the sector contributes to total activity.”
“The segment that feeds into GDP next week ‘Plant and equipment’ declined 1.3%.”
Key Quotes
“Q4 Private Capex was down –2.2% over the quarter vs expectations for a –1.6% decline. Q3 capex was revised upwards from 0.2% to 0.6%, but it was today’s 5th estimate for 2014/15 and the 1st estimate of capex intentions for 2015/16 that revealed a slowing in the non mining / services sector of the economy.”
“Actual services capex in Q4 rose only +1.4% on the quarter, well below the run rate seen last year (Q1 +3.8%, Q2 +4.4% and Q3 +6.6%) while services capex is forecast to decline –7% over 2015/16, vs TD’s forecast for a +9% rise.”
“Although there is significant volatility associated with the first estimate, today’s number suggests that the much awaited recovery in services to fill the void to be left by mining is unlikely to materialise anytime shortly.”
“Mining sector capex is expected to fall -21%, close to the -25% decline we had forecast while manufacturing intentions drop -21% but this is of less concern given how small the sector contributes to total activity.”
“The segment that feeds into GDP next week ‘Plant and equipment’ declined 1.3%.”