MNI 5 THINGS. Australia Private New CAPEX misses forecast

--Despite Miss, Signs Remain Positive; Signals For Healthy GDP Print

By Lachlan Colquhoun

     SYDNEY (MNI) - Australian Private New Capital Expenditure fell a seasonally

adjusted 0.5% in Q3, but still showed a strong investment pipeline which will

feed into GDP data due for release next week.  

     Here are five factors of note from Thursday's data release by the

Australian Bureau of Statistics:

     --CAPEX falls , but large upwards Q2 revision. Private new capital

expenditure fell 0.5% Q/Q to A$29.3 billion in the September quarter, missing

analysts' average forecasts of a 1.0% gain. The negative result, however, was

largely due to a major revision of the Q2 result, which was revised from 2.5%

fall to a much smaller 0.9% decline.

     --Higher Q4 estimate. The ABS is now forecasting a higher than expected Q4

CAPEX estimate of A$114.1 billion, up 4.4% on the Q4 estimate for 2017/8 and,

more significantly, up 11.3% on the Q3 estimate for 2018/9.

     --Strong investment in plant and equipment. A major positive in today's

result was the 2.2% increase for investment in equipment, plant and machinery,

which rebounded from a 0.3% decrease in Q2. Australian businesses invested

A$13.7 billion in this category in Q3. 

     --Building investment still weighs. In contrast, investment in building and

structures fell 2.8% Q/Q and 7.0% Y/Y, once again underlying this sector's

weakness, also highlighted in disappointing construction data this week.

Thursday's result was the fourth consecutive Q/Q fall. Among industry sectors,

mining investment continues to be weak, with a fall of 2.7% Q/Q.

     --Eyes on GDP next week. The market will now focus on Q3 GDP data due to be

announced next Wednesday. The growth seen across investment in plant, machinery

and equipment has the market looking for a Q3 rise of between 0.5% and 1.0% in

GDP. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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