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Andrew Hanlan, Research Analyst at Westpac, notes that the Australia’s Q3 capex survey provided an upside surprise and the plans for capex spending in 2018/19 are positive with an upward revision to the plans of three months earlier.

Key Quotes

“As to capex spending in Q3, this edged lower, down 0.5%. The outcome was weaker than expected (market median +1.0% and Westpac +0.4%).”

“2018/19 capex plans: Est 4 is $114bn, +4.4% vs Est 4 a year ago. This represents an upgrade on Est 3, which was -1% vs Est 3 a year earlier.”

“The Est 4 on Est 4 figures by industry are: mining -1% (vs -4% 3 months ago); services is +7% (from flat) and manufacturing +7% (from +3%).”

“In terms of key themes, mining investment will move lower in 2018/19, while non-mining investment is in an uptrend to meet the needs of a fast growing population.”