Australia's ABS survey's current CAPEX estimates points downside risks to 2015/16 growth outlook

The trend estimate for Australia's total new CAPEX slumped 6.5% in the third quarter of 2015. 

By asset type, the trend estimate for buildings and structures dropped 7.0% and equipment, plant and machinery slumped 4.7%. The seasonally adjusted estimate for total new capital expenditure slipped 9.2% in the September quarter 2015.

Estimate 4 for total capital expenditure in 2015-16 is $120,353 mn, which is around 20.9% lower than Estimate 4 for last year. Mining (-34.1%) is the main contributor for the decrease. Other Selected Industries (+6.1%) is the main contributor to this increase.

Estimate 4 for buildings and structures in 2015-16 is $77,038m, 27.2% lower than Est 4 of last year. Estimate 4 for equipment, plant and machinery for 2015-16 is $43,315m, 6.3% lower than Est4 of last year. Estimate 4 for Manufacturing for 2015-16 is $8,084m, 3.6% lower than Estimate 4 for 2014-15. 

"The survey, on current estimates, points to downside risks to the growth outlook for 2015/16. However, we continue to expect that investment by the service sectors, while unlikely to be strong, will be more resilient than suggested by the capex survey", says Westpac in a research note.