Australian capex Q4: Downbeat in both headline and 2017/18 estimate

Australian capex (private capital expenditure) for Q4 has disappointed market participants, following a capex headline of -2.1% q/q vs -0.5% expected and -4% last. Equipment, plant and machinery was +0.4% vs -1.9% last, buildings capex came at -4.1% vs -5.7% last. Meanwhile, the first estimate for 2017/18 capex was AUD80.6bln vs 84.8 exp, while the fifth estimate for 2016/17 stood at AUD112.2bn.

DECEMBER KEY POINTS

ACTUAL EXPENDITURE (VOLUME TERMS)

The trend volume estimate for total new capital expenditure fell 3.1% in the December quarter 2016 and the seasonally adjusted estimate fell 2.1%.
The trend volume estimate for buildings and structures fell 4.7% in the December quarter 2016 and the seasonally adjusted estimate fell 4.1%.
The trend volume estimate for equipment, plant and machinery fell 0.4% in the December quarter 2016 while the seasonally adjusted estimate rose 0.4%.

EXPECTED EXPENDITURE (CURRENT PRICE TERMS)

This issue includes the fifth estimate (Estimate 5) for 2016-17 and the first estimate (Estimate 1) for 2017-18.
Estimate 5 for 2016-17 is $112,155m. This is 9.0% lower than Estimate 5 for 2015-16. Estimate 5 is 4.6% higher than Estimate 4 for 2016-17.
Estimate 1 for 2017-18 is $80,625m. This is 3.9% lower than Estimate 1 for 2016-17.
See pages 7-10 for further commentary on expectations data.