The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the March quarter of 2013, which registered a seasonally-adjusted -4.7% fall in capex over the quarter and a -4.4% decline over the year. The result disappointed analyst’s expectations of a 0.5% increase over the quarter (see below table).
While Houses and Holes will cover the more important capex intentions survey, which covers industry’s forward-looking capex plans over the coming years, below are some backward looking charts showing actual capex up to the March quarter of 2013.
The first chart below shows actual capex by industry in dollar terms (rather than volume terms as shown above). As you can see, the fall in total capex (-4.7%) was driven by the mining sector, where mining capex fell by -6.1% (see next chart).
What is particularly disappointing about this release is that manufacturing capex has failed to fill the void. It too fell by -0.9% over the quarter, whereas “other” capex fell by -3.0%. Manufacturing capex is now at near decade lows in nominal terms, with its share of total capex slumping to just 6% (see below charts).
The decline in overall capex was driven by Western Australia, where capex fell by -13% over the quarter. Falls were also recorded in New South Wales (-5.5%), Victoria (-3.1%), and the Northern Territory (-12.1%), whereas Queensland (+5.7%) and South Australia (+15.7%) bucked the trend.
Overall, this is a bad data release for Australia. The mining investment boom that has powered the Australian economy has peaked more quickly than expected by Australia’s economic officials. Moreover, there was no offset from the non-mining economy, with manufacturing capex also declining.
