"You are likely to see some downwards revisions to GDP. Weakness is across the board, in services and capex. Total planned spending looks largely unchanged since the last time. So these are still pretty soft numbers all around."
- Su-Lin Ong, RBC Capital Markets
Private capital expenditure in Australia dropped sharply in the third quarter, driven by renewed weakness in mining investment. Australian firms held back on investing in new capital in the three months through September, signalling business confidence is still weak amid Australia's economic transition away from mining-driven growth. Private capex plummeted a seasonally adjusted 9.2% quarter-on-quarter, marking the biggest decline in more than 15 years, the Australia Bureau of Statistics said. The sharp fall in the July-September period followed the 4.4% decrease in the preceding quarter. Economists, however, had expected a milder decline of 2.8% in the reported period. Mining expenditure plunged 10.4% over the quarter, with spending on buildings and structures tumbling 10.5% and spending on plant and machinery down 9.7%. The fourth estimate for 2015-2016 private capex spending came in at $120.35 billion, revised up from the third estimate of $114.81 billion.
Reserve Bank of Australia Governor Glenn Stevens admitted that the slowdown in mining investment is only about half way through its cycle, and did not expect an immediate recovery in non-mining investment ahead for Australia.
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