Australia: Q1 private capex likely to post a decent print of +2.7% - TDS

Analysts at TD Securities are looking for a decent print of +2.7%/q (mkt +0.5%) for Australia’s Q1 private capex, while this is entirely skewed towards non-residential construction (+6%/q) as foreshadowed in the recent Q1 construction report.

Key Quotes

“The sector that feeds into GDP – plant and equipment – is expected to be weak (f/c -1%/q). For 2018/19 (almost an actual print) we look for a modest upgrade from $A118.3b to $A122.8b (a 4% increase compared with 2% in the prior survey) and an upgrade from $A92.1b to $A100b for next year 2019/20 (although after adjustment is the same 1% increase).”

“Building approvals for Apr are also released and we have seen double-digit swings in both directions in recent months. The odds therefore favour a flat print (mkt agrees at +0.3%/m) as predicting the appearance/disappearance of high-density buildings in this series is near-impossible.”