I posted a preview of the Q2 Capital Expenditure data here a few minutes ago
Some commentary from Westpac:
- The emergence of a sustained upswing in investment by the service sectors is a key element in the economy's successful transition from growth led by mining investment to strength across the broader economy
- Some fundamentals are in place for an emerging and sustained uplift in service sector investment. Notably, demand across the non-mining economy grew by an above trend 3.8% over the past year. (Here we are referring to household and public demand, plus net service exports). Furthermore, some spare capacity has been absorbed, as evident in the private business surveys.
- However, potentially impacting Estimate 3 is the lingering uncertainty around public policy following the close Federal election result. That could see businesses delay committing to additional investment. Moreover, the impacts of the mining investment boom and its subsequent unwind are far reaching. Some service sectors provide inputs into mining projects and these linkages are now a source of weakness.
