Australia: Outlook for Capex is now looking more positive - NAB

The National Australia Bank (NAB) is out with a detailed preview of the Australian Private Capital Expenditure q/q, a key input to the Q2 GDP figures, due for release this Thursday at 0130 GMT.

Key Quotes:

“Capital Expenditure is one such partial, which will be closely watched to both solidify forecasts for the investment component of GDP and get a better gauge of the emerging recovery in business investment.

NAB's forecast is for actual expenditure to lift 0.6% q/q in Q2 (mkt: 0.8% q/q) and expectations for 2018/19 to rise to $105.5 b (from $88b).

Outlook for capex is now looking more positive. 

The drag from mining capex is clearly diminishing and, encouragingly.

Signs mining investment may actually pick up in the not-too-distant future.

Nevertheless, actual mining capex this quarter is still expected to have declined a relatively modest 2% q/q.

We expect a relatively modest decline in mining capex expectations for 2018/19 - we forecast the 3rd estimate for spending to be 5.3% lower than comparable 2017/18 expectations.

Non-mining capex:

The lift in investment has already begun

Is set to continue in Q2 - NAB has a rise of 1.5% q/q penciled in.

Going forward, the outlook remains constructive, with lots of infrastructure and commercial building work supporting investment.

2018/19 non-mining capex intentions have been on the rise.”