Australia Q4 capital expenditure figures beat expectations
Australia's private sector capital expenditure (CAPEX) rose 2% in Q4 beating expectations of 0.5%
Australian Bureau of Statistics (ABS) figures show private sector capital expenditure (CAPEX) rose 2% in Q4 beating expectations.
CAPEX rose by 2% in seasonally adjusted chain volume terms to $30.1 billion, exceeding forecasts of 0.5% increase. CAPEX had dropped 0.5 percent in the three months to September 2018.
The ABS figures show that Australian business investments were stronger in the December quarter (Q4) last year, which will provide a boost to the GDP, which is to be released next week.
CAPEX rose by 1.9% a year ago, driven by strong investment in plant and equipment.
CAPEX on building and structures rose by 3.2% to $161.1 billion, while investment in this category fell by 2.9% from a year ago.
Investment on equipment, plant and machinery rose by 0.7% to $14 billion, up significantly by 8.1% from a year ago.
The trend volume estimate for equipment, plant and machinery rose by 1.5% in the December quarter 2018 while the seasonally adjusted estimate rose by 0.7%.
Positive impact on Q4 GDP
The ABS figures will play a role in directly boosting Australia’s Q4 GDP report, after a plight of softer readings on retail spending and construction in the December quarter.
Estimates for CAPEX in 2019-20 came in at $92.1 billion, higher than the $90.5 billion level expected by financial markets, and 11% higher than the first estimate offered in 2019-19.
According to the ABS, the buildings and structures series is impacted by a sectoral change in the current quarter.
Aussie climbs on strong CAPEX
In early Thursday trading the AUD/USD was sitting just below $0.7143, and climbed higher after the better than expected capex, siting at $0.7160.
The climb comes just before Chinese CPI data which analysts predict would see AUD/USD rally.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.