Australian data – Q2 Capex headline rose 2.8% vs. +1.2% expected

<p>Some encouragement from business inverstment data from Australia in the second quarter. </p><ul><li>Total new capital expenditure rose by 2.8%
</li><li>
Buildings and structures rose by 3.5%
</li><li>
Equipment, plant and machinery rose by 1.9%
</li><li>
Estimate 3 for 2023-24 is $157.8b. This is 14.5% higher than Estimate 2 for 2023-24</li></ul><ul><li>Private new capital expenditure (capex) rose 2.8 per cent (seasonally adjusted, chain volume measure) in the June quarter 2023 and was 10.8 per cent higher than a year ago</li><li>the result was driven by businesses investing more in new equipment and machinery (+1.9 per cent) as well as in building and structures (+3.5 per cent).</li><li>Australian Bureau of Statistics (ABS) commentary: “Increased investment in equipment and machinery reflects a further easing of supply-chain disruptions, with the availability of vehicles improving significantly during the quarter. Some businesses also brought investment plans forward, ahead of the end of the temporary full expensing tax incentive on 30 June.”

“The increase in investment in buildings and structures was boosted by a number of mining projects for resources such as lithium used in batteries, and the commencement of some previously delayed projects in non-mining industries.”</li><li>The construction industry recorded the largest rise in total capex, up 30.5 per cent after large falls in the last two quarters.

“The rebound in capex in the construction industry was driven by small businesses receiving vehicles and construction machinery after extended delivery delays,” </li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.