Bassanese: Investment outlook still weak

The ABS capital expenditure survey reports on business capital spending for the current quarter, as well as progressive updates on expected spending for the current financial year. The latest official June quarter survey of business investment expectations was released last week. Following on from the shock slump in investment intentions in the March quarter survey, the hope was that intentions might be revised up in light of the recent weakness in the $A and an apparent lift in business confidence indicators over recent months. Sadly, the outlook has not improved much. The 3rd estimate of investment spending was 23 % lower than the comparable 3rd estimate for last financial year, as stated in the June 2014 quarter survey. This was also the largest percent decline in a 3rd estimate since the survey began. As seen in the chart below, the expected decline in investment spending largely stems from the mining sector – with expected spending actually falling a little further in the last survey. (VIEW LINK)