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%.
EXPECTED EXPENDITURE (CURRENT PRICE TERMS)
- 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.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.