Mining capex booms on

The bullhawk’s bible is out. ABS Private Capital Expenditure. Here’s the headline release:



  • The trend volume estimate for total new capital expenditure rose 3.3% in the March quarter 2011 while the seasonally adjusted estimate rose 3.4%.
  • The trend volume estimate for buildings and structures rose 2.6% in the March quarter 2011 while the seasonally adjusted estimate rose 4.5%.
  • The trend volume estimate for equipment, plant and machinery rose 3.8% in the March quarter 2011 while the seasonally adjusted estimate rose 2.4%.


  • This issue includes the sixth estimate (Estimate 6) for 2010-11 and the second estimate (Estimate 2) for 2011-12.
  • Estimate 6 for 2010-11 is $124,096m. This is 14.2% higher than Estimate 6 for 2009-10. Estimate 6 is 4.0% lower than Estimate 5 for 2010-11.
  • Estimate 2 for 2011-12 is $139,538m. This is 30.9% higher than Estimate 2 for 2010-11. Estimate 2 is 3.5% higher than Estimate 1 for 2011-12.

And following are the key charts for expected capex. First, for the economy:

What can you say? We are so damn lucky!

Next, for mining, and it’s off the chart as expected:

Then manufacturing, its primary victim:

Then everything else, which is flat as a pancake:

This has economic adjustment written all over it. And yes, capex expectations are higher again, with rises in mining offsetting falls elsewhere. There’s nothing here to take the pressure off the RBA’s medium term outlook and bias to tighten.

Houses and Holes
Latest posts by Houses and Holes (see all)


  1. Lets give it up for Adam and the Bullhawks and their new song “Boom Baby Boom!”

    • Seriously though, Carr makes the point:

      By sector, investment in “other” sectors rose 5.4 per cent (reflecting investment in transport, rental and real estate services, construction, wholesale and other services) after a 4.5 per cent lift (up 4.7 per cent year-on-year).

      What are people’s thoughts on this? Does “other” exclude mining and everything to do with mining, or is some of this “other” construction, transport and engineering related to mining investment?

      • Read his piece. Reeked of capitulation on June to me. On “other” category, check out the expected chart above. The seasonal pattern is that expectations ramp as the year progresses. No ramp this quarter…adjustment is go!

  2. Who cares! I’m sure Dubai’s capex ramp looked good on paper. Ditto tourism. What ever happened to all the new jetfleets that were going to fill the skys?

    Can you get into production before the tide turns against you? Profitability before receivership? Tis one thing to build, another to be in profitable production.

    I remember the 70’s/80’s when turbulence was all the rage.

    Certain coal mines went like this:

    Build, commission, C&M- care and maintainence-mothballed.

    More like a Lipton Tea Clipper race.

    • 2007- 2009 BHP built the Ravensthorpe Nickel Mine in WA, nickel prices fell and BHP promptly shut it down, almost overnight. This was a substantial project. ($US2.2billion build, 1800 workers) Nickel was around US$50,000/tonne in 2007, by 2009 around US$11,000/tonne, currently just over double that). Eventually sold to a Canadian company for $340m.

      When you’ve been in resources long enough you understand only too well the cyclical nature of the beast. A little ‘Make hay while the sun shines’…and then move on.