Australia Q2 Capex: -4.0% (vs. -2.5% expected)

Australian Q2 Private Capital Expenditure -4.0% (a miss)

• expected is -2.5%
• prior was -4.7%, revised from -4.4%

The 4% number equates to an annual fall of 10%

For the Equipment, plant and machinery -1.2%

• vs. -1% expected

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(I did a preview here, for background)

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3rd estimate at $A114.8bn 

• expectations were around $A111bn
• the prior, estimate 2, was at $A104bn ... so today's result on this is an improvement

Quick take

• Headline is awful
• 3rd estimate is a beat, which softens the blow somewhat

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More ... via Australian Bureau of Statistics

ACTUAL EXPENDITURE (VOLUME TERMS)

•     The trend volume estimate for total new capital expenditure fell 3.9% in the June quarter 2015 while the seasonally adjusted estimate fell 4.0%.
•     The trend volume estimate for buildings and structures fell 5.3% in the June quarter 2015 while the seasonally adjusted estimate fell 5.6%.
•     The trend volume estimate for equipment, plant and machinery fell 0.8% in the June quarter 2015 while the seasonally adjusted estimate fell 1.2%.

EXPECTED EXPENDITURE (CURRENT PRICE TERMS)

•     This issue includes the seventh estimate (Estimate 7) for 2014-15 and the third estimate (Estimate 3) for 2015-16.
•     Estimate 7 for 2014-15 is $150,579m. This is 4.7% lower than Estimate 7 for 2013-14. Estimate 7 is 0.5% higher than Estimate 6 for 2014-15.
•     Estimate 3 for 2015-16 is $114,814m. This is 23.4% lower than Estimate 3 for 2014-15. Estimate 3 is 9.9% higher than Estimate 2 for 2015-16.

The final set of columns (over on the right of the graph, for 2015-16) shows how far planned expenditure has fallen. This is NOT surprising (as I pointed out in the earlier preview); in fact what is (mildly) surprising is the improvement in plans for Estimate #3 compared to the previous (Estimate 2). Like I said ... not a huge improvement,,, but we'll take what we can get.