CapEx declines
The Fed's Mary Daly yesterday stated her bias for running the US economy hot, noting that the benefits to employment and growth outweigh the potential costs, and that persistently running inflation below the 2 per cent target was 'worrisome'.
Perhaps with luck her next gig will be Down Under, because here we're rapidly approaching half a decade of CPI below the target in Australia!
Today there was plenty of upbeat reporting of what was, in the end, another negative result for CapEx.
Total private new capital investment fell by 0.5 per cent in the June quarter to be down 1 per cent year-on-year at $29.2 billion.
On the upside mining investment has at least bottomed, and this sets the scene for a recovery in 2019-2020.
Around the states New South Wales saw a solid 5 per cent increase in capital investment over the financial year, and there were double-digit gains for Victoria and South Australia.
But the mining jurisdictions continued to drag, for one final financial year.
In the post-Ichthys Northern Territory, which only accounts for a small share of the total, investment fell by more than 60 per cent in FY 2019.
The wrap
Overall the result for actual investment was undeniably weak.
On the plus side the third estimate for 2019-20 was notably better than the prior year equivalent figure at $113.4 billion.
As such the outlook is arguably a little brighter with mining investment no longer falling and services businesses tentatively ramping up investment plans.
However, the partials will be a further drag on GDP for the second quarter, with the end result looking set to be a damp squib.
