(31 May 2024 – Australia) Private new capital expenditure (capex) rose one percent in the March quarter 2024 to be 5.5 percent higher year-on-year according to the Australian Bureau of Statistics (ABS).
Expanded investment in data centres contributed to a large rise in equipment and machinery capex for the information media and telecommunications industry, up 60.6 percent. New equipment and machinery capex rose by 3.3 percent, with non‑mining industries growing by 4.6 percent, offset by mining falling 3.2 per cent.
Businesses revised up expected capex spend for 2023/24 by 2.5 percent since the last estimate three months ago.
“Business investment grew in the non-mining industries in the March quarter, rising 3.3 percent. This was partly offset by a fall in mining capex, which was down 4.7 per cent. Transport, postal and warehousing saw the largest rise of any industry, up 15.8 per cent. This was from more investment in vehicles and ongoing investment connected to large infrastructure projects” stated ABS Head of Business Statistics, Robert Ewing.
“The rise in planned capital investment shows that businesses expect continued growth in new capital expenditure for the remainder of this financial year and the year ahead. The information media and telecommunications industry was the stand-out, with an extraordinarily large rise in expected capex from further planned investment in new data centres. The electricity, gas, water, and waste services industry also expect a big rise from planned investment in renewable energy infrastructure” Mr Ewing added.
“The Q1capex release points to a positive investment outlook. The private machinery/equipment expenditure data were stronger than expected suggesting moderate growth in business investment this financial year” commented ANZ Senior Economist, Blair Chapman.
“The release suggests that businesses expect capex to continue to grow at a decent pace over the next five quarters. Importantly, we saw the price of machine and equipment fall, the second quarterly fall in the last three quarters. This suggests that the supply chain disruptions coming out of the pandemic have largely been resolved and businesses are taking advantage” said Westpac Senior Economist, Pat Bustamante.
“Businesses, who had to put investment spending on hold in the pandemic and struggled once again to expand capacity during various post-COVID supply shocks, still see a need to build their capital stocks. It is allowing the business sector to respond to structural changes and invest in the transition to net zero.”