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27 Feb 2014
Flash: Weak Q4 Australian capex numbers - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, provides his take on the weak Australian capex in Q4 and outlook.
Key Quotes
"Australian capital expenditure fell 5.6%q/q in Q4, well below -1.3% expected, and was revised down from +3.6% to +2.6%q/q in Q3. Mining investment fell 5.5%q/q, making it clearer that the peak is in for this sector (its trend estimate is down 0.6%q/q). Manufacturing sector investment fell 7.0%q/q remaining very weak (trend estimate down 1.6%q/q). Perhaps most disappointing was a fall back in 'other select industries' that had increased in recent quarters. It fell 4.4%q/q in Q4, turning its trend estimate back down (-0.6%q/q)."
"The forward looking survey of investment expectations (estimate 5 for 2013/14) was 0.5% up from the same estimate a year earlier. Mining was down 1.2%y/y, manufacturing was down 3.2%, other selected industries was up 4.2%y/y. Not that impressive, implying no real growth."
"Estimate 1 for the next financial year (2014/15) was 17.4% lower than the 1st estimate for the current financial year made a year ago. This first estimate is always subject to sharp revisions and thus cannot be relied on, but it is a weak outlook for next financial year. Mining, unsurprisingly led this fall, down 25.2%y/y, manufacturing was down 19.6%y/y, still looking very weak, 'other selected industries' was up 0.4%y/y, not very strong."
"Overall a weak quarterly number and an outlook where mining investment slows faster, manufacturing goes from weak to weaker, and other selected industries recovers but tepidly."
Key Quotes
"Australian capital expenditure fell 5.6%q/q in Q4, well below -1.3% expected, and was revised down from +3.6% to +2.6%q/q in Q3. Mining investment fell 5.5%q/q, making it clearer that the peak is in for this sector (its trend estimate is down 0.6%q/q). Manufacturing sector investment fell 7.0%q/q remaining very weak (trend estimate down 1.6%q/q). Perhaps most disappointing was a fall back in 'other select industries' that had increased in recent quarters. It fell 4.4%q/q in Q4, turning its trend estimate back down (-0.6%q/q)."
"The forward looking survey of investment expectations (estimate 5 for 2013/14) was 0.5% up from the same estimate a year earlier. Mining was down 1.2%y/y, manufacturing was down 3.2%, other selected industries was up 4.2%y/y. Not that impressive, implying no real growth."
"Estimate 1 for the next financial year (2014/15) was 17.4% lower than the 1st estimate for the current financial year made a year ago. This first estimate is always subject to sharp revisions and thus cannot be relied on, but it is a weak outlook for next financial year. Mining, unsurprisingly led this fall, down 25.2%y/y, manufacturing was down 19.6%y/y, still looking very weak, 'other selected industries' was up 0.4%y/y, not very strong."
"Overall a weak quarterly number and an outlook where mining investment slows faster, manufacturing goes from weak to weaker, and other selected industries recovers but tepidly."