Australia: Q1 CAPEX plans should show some upward revision – RBC CM

The analysis team at RBC Capital Markets suggests that in the forthcoming Australian Q1 CAPEX, plans for both FYs should, show some upward revision, especially 2017–18.

Key Quotes

“There are three key numbers in the detailed CAPEX survey. Firstly, real capex in Q1, which we expect to have fallen modestly (RBC -0.5%) as the capex downturn begins to abate. This will feed into Q1 GDP due on 7 Jun, which is shaping up on the soft side. Secondly, an update on nominal spending plans for FY2016–17. And thirdly, the second estimate of plans for FY2017–18.”

“We note that the survey was conducted over the last 6–8 weeks, with business confidence at a 7-year high and conditions holding at a decade-high. Plans for both FYs should, accordingly, show some upward revision, especially 2017–18 with an inherent upward bias in the early estimates.”