Private Capex - Momentum Stalling?

Private capital expenditure (also known as capex) rose 0.4% in the March quarter. It was the fifth consecutive quarterly increase, but the pace of growth has slowed over the last six months.
While it was encouraging to see mining capex lift in the quarter, investment intentions continue to suggest that the unwinding of the mining investment boom is not over just yet. Mining capex rose 1.2% in the quarter.
Total non-mining capex (manufacturing and other) grew just 0.1%, weighed down by a drop in manufacturing capex. It was the softest increase in non-mining capex in 1½ years.
Business spending was driven higher by NSW and Victoria. In the March quarter, capex in these States rose 2.3% and 1.1%, respectively.
The second estimate for spending in 2018-19 was $83.0 billion, an upgrade from the first estimate of $83.0 billion previously. However, after adjusting the estimate (using realisation ratios) it implies a virtually unchanged outcome to the previous quarter.
The plans for non-mining investment were somewhat discouraging, and do not suggest much growth in spending over 2018-19.
Early estimates do not tend to be great predictors of actual spending, and are typically revised upwards as the year progresses. However, it was disappointing to not see a larger upgrade given that business conditions are tracking at record high levels. A clearer picture will emerge in the next capex release.

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