The Australian Bureau of Statistics (ABS) today released data on capital expenditures (capex) for the June quarter of 2013, which registered a seasonally-adjusted 4.0% rise in capex over the quarter but a 2.3% decline over the year. The result exceeded analyst’s expectations of no change 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 June 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 rise in total capex (4.3%) was driven by the mining sector, where mining capex rose by 6.8% (see next chart).
While the news on the mining front was good, with the capex cliff averted for the time being, manufacturing capex continued to decline. It fell by 7.8% over the quarter, whereas “other” capex rose by 2.3%. Manufacturing capex is now at decade lows in nominal terms, with its share of total capex slumping to just 5% (see below charts).
The rise in overall capex was driven by Western Australia, where capex rose by 5.6% over the quarter. Capex also rose solidly in Queensland (+3.6) and the Northern Territory (+2.6%), whereas solid falls were recorded in New South Wales (-3.8%), South Australia (-7.5%), Tasmania (-8.3%) and the ACT (-45.3%):
Looking ahead, the capex pipeline continues to trend lower, due to falling planned mining investment (see next chart).
Overall, this release augers well for the upcoming GDP print, with the rise in capex after three quarters of falls signalling more of a plateau than a cliff. That said, the longer-term outlook probably hasn’t changed. Mining capex is still facing a prolonged period of falls, although the timing is uncertain.
