Australia: Retail sales surge higher, house prices fell and private capex disappointed - TDS

Analysts at TDS point out that a flurry of Aussie data releases today with the Q1 Private Capex coming in below market expectations at +0.3%/q (mkt 0.5% TD 1.0%) to A$28b.

Key Quotes

“Looking at forward spending projections, the second estimate for spending in 2017-18 was A$85.4b, a –5% decrease from December’s first estimate. Capital spending plans for 2016/17 all remained unchanged with mining falling –30%/y, manufacturing +2%/y, services +0.4%/y. Capital spending plans for 2017/18 also unchanged with mining –30%, manufacturing –18%, services +1.4%. Overall, this points to total investment falling by -12% for this year and –11% for the following year.”

“Apr Retail sales jumped higher +1.0% above market consensus (mkt: +0.3%, TD: +0.5%) with all sectors reflecting increases and a 1.2% jump from the food sector. However, Easter effects might be at play and we await next month’s data for more information about the consumption trend.”

“House prices in May fell –1.1% but May has seasonally been negative for past years with the exception of last year. Sydney and Melbourne prices dropped –1.3% and –1.7% respectively. On an annual basis, house prices “slide” from +11.2% to +8.2%. May Manufacturing PMI slips to 54.8 (prior: 59.2) with production slipping 8.4pts.”