25 Feb 2016
AUD: Capex rose supported by services - TDS
Research Team at TDS, notes that the Australian Q4 Capex rose 0.8%, better than the –3% fall the market was expecting thanks to services (non mining investment) rising 3.1%.
Key Quotes
“However expectations for capex in 2016/17 came in below expectations, the 1st estimate raw read coming in at A$82.6b vs the A$92.8b the market pencilled in. Mining capex is expected to drop 35% over 2015/16 estimates ( we had a decline of 20%), but once again there was no sign of a bounce in services investment, with this expected to decline 7% compared to 2015/16.
The RBA has downplayed the capex report in that it does not capture a large share of non-mining investment, but that said, questions around a rebound in services investment, which is what the RBA is looking for, remain in the air. There is nothing in today’s data to trigger a RBA rate cut in the near term.”
Key Quotes
“However expectations for capex in 2016/17 came in below expectations, the 1st estimate raw read coming in at A$82.6b vs the A$92.8b the market pencilled in. Mining capex is expected to drop 35% over 2015/16 estimates ( we had a decline of 20%), but once again there was no sign of a bounce in services investment, with this expected to decline 7% compared to 2015/16.
The RBA has downplayed the capex report in that it does not capture a large share of non-mining investment, but that said, questions around a rebound in services investment, which is what the RBA is looking for, remain in the air. There is nothing in today’s data to trigger a RBA rate cut in the near term.”