eyes on this week's Aussie the CAPEX survey - Westpac
Analysts at Westpac explained that the ABS survey of private business investment plans, the CAPEX survey, will provide some further guidance on growth prospects.
"The September quarter update will be released on November 30, including the 4th estimate of capex plans for 2017/18, as well as actual capex spending for Q3 2017.
Here we provide scenarios for Estimate 4 of 2017/18 plans. Historically, capex plans begin to become more reliable when the outcome for the preceding year is known, that is from Est 3 on.
The September quarter survey was conducted in October and November. Private business surveys report that business conditions are elevated and business confidence is a little above average, broadly as was the case three months earlier. However, the expansion is uneven, with weakness centred on consumer spending. The household sector remains under pressure with persistent weak wages growth (despite recent higher commodity prices boosting national income) and high debt levels.
Business investment spending, as measured by the capex survey, will likely be a little lower in 2017/18 than in 2016/17, reflecting the final stages of the mining investment wind-down.
However, the national accounts will, in time, likely show business investment in 2017/18 is a little greater than in 2016/17. The capex survey excludes some areas of strength (health, education and agriculture, as well as computer software spending) and as such overstates the importance of mining."