Private capex outlook hints at stall

ABS has released June quarter private capex and it is OK:

This issue includes the seventh estimate (Estimate 7) for 2017-18 and the third estimate (Estimate 3) for 2018-19.

Estimate 7 for 2017-18 is $118,927m. This is 4.0% higher than Estimate 7 for 2016-17. Estimate 7 is 1.0% higher than Estimate 6 for 2017-18.

Estimate 3 for 2018-19 is $101,997m. This is 1.1% lower than Estimate 3 for 2017-18. Estimate 3 is 16.1% higher than Estimate 2 for 2018-19.

That implies a roughly 2% fall in capex year over year using average realisation rates. That said, I expect it to fall away from here as the Canberra chaos and election campaign take there toll. So that realistion ratio is almost certainly too high and the fall will be materially larger:

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About the author

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.