Australia: Solid capex upgrades expected for Q1 – ANZ
|Analysts at Australia and New Zealand (ANZ) Banking Group offer their expectations on the Australian Private Capital Expenditure data due to be released later this week.
Key quotes
“We expect Australian private new capital expenditure to have risen 3% q/q in Q1 2021, matching the increase in Q4 2020.”
“We think firms will upgrade their planned capex to $126bn in 2020-21 (from $121bn) and to $114bn in 2021-22 (from $105bn). Both would represent larger than usual upgrades for this time of year, driven by the rapid improvement in the consumer and business sectors on top of fiscal incentives.”
“There is upside risk to these expectations if firms upgrade their capex plans more quickly, given the strong demand outlook and the rise in profits through 2020.”
“There is also downside risk if some businesses are yet to firm up their capex plans, given the unexpectedly rapid economic recovery, or if some remain hesitant to make large investment commitments, particularly given the slower-than-expected vaccine rollout and ongoing risk of outbreaks and restrictions.”
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