Did the RBA’s capex unicorn just jog into view? Via Credit Suisse:
There is now more than just a scent of animal spirits wafting from Australia Inc. For only the third reporting season since 2012 (the end of the mining boom) companies have guided to higher capex. The upgrades have been considerable at 4.9% for the ASX 200 ex financials which are the biggest in over ten years (Figure 5).
The rise in capex guidance has been broad-based. Of the ten sectors we highlight in Figure 6, seven have guided to more business investment than previously forecast by analysts. Some of the biggest dividend upgrades were in sectors where companies are currently enjoying revenue growth — Utilities, Health Care, Mining, Tech and Energy. Sectors where the top-line outlook is a little more worrisome like Telecoms and Consumer Discretionary (which includes retail) guided to lower capex.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
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.
