There was just a hint that our big investment boom might be cooling in the September quarter new and expected investment figures.
The figures showed a 6.2% rise in new capex in the September quarter to $28.68 billion, according to figures from the Australian Bureau of Statistics.
Of that, mining accounted for a record $10.98 billion of spending in the quarter.
The increase was up from the improved, revised 3.2% fall in the June quarter (4% fall originally).
The rise, which was around double some market expectations, will help offset the surprise 2.1% fall in new construction work done in the quarter.
It was the fastest growth rate since the March quarter of 2007, before the start of the GFC.
The rise in capital expenditure is in real terms, compared with a 3% forecast in the market (although the AMP saw a rise of around 6%).
The increase came mostly from the mining sector, and that obscured the surprise drop in spending on plant and machinery, and a downturn in mining and manufacturing expectations in the quarter.
And that’s the key and why the figures will not startle the Reserve Bank ahead of its last board meeting for the year on December 7.
The central bank has been factoring in a drop off in some of the more ambitious spending plans.
In terms of the third quarter growth figures out next Wednesday, the capex figures may not have as big an impact as the topline 6.2% rise suggests because of the fall in spending on plant and machinery.
In fact quite a few economists were surprised by the fall and have cut their estimates for growth to a range of 0.1% to 0.3% from 0.6% to 0.9%.
Some are even saying that if the profits, wages and inventories data on Monday are weak, the economy could have had negative growth in the September quarter.
And the questions over the strength of the figures was underlined by the fourth estimate of expenditure for 2010-11.
At $123.941 billion, it’s 19.5% higher than the fourth estimate for 2009-10.
But it’s flat on the 3rd estimate, made three months ago, for the 2011 year, a sign that perhaps the boom has reached its upper limits.
(Estimates are gathered in a series of seven quarterly surveys, the first in January and February before the start of the financial year in July, and the seventh immediately after the financial year ends.)
Looking at the breakdown of the actual spending in the September quarter, the seasonally adjusted estimate for the first major component of capex, buildings and structures, rose 13.4% in the September quarter 2010 to $15.38 billion.
Mining saw a rise of 17.6%, Manufacturing dropped 11.8% and Other selected industries saw a rise of 13%, seasonally adjusted.
For equipment and machinery, the other major component, the seasonally adjusted series fell 1.1% to $13.88 billion in the quarter.
Mining rose 8.8%, Manufacturing fell 3.1% and Other selected industries fell 3.0% (and that was the big surprise in yesterday’s figures).
The ABS said the seasonally adjusted September quarter estimate for Mining rose 15.6%, with buildings and structures up 17.6% while equipment, plant and machinery rose 8.8%, seasonally adjusted.
Manufacturing saw a 6.3% fall in the seasonally adjusted September quarter estimate.
Buildings and structures fell 11.8% and equipment, plant and machinery fell 3.1%.
Other selected industries saw a rise of 2.6%, seasonally adjusted, in the three months to September.
The ABS said buildings and structures rose 13.0%, but equipment plant and machinery fell 3.0%.
Looking at the four estimates for the year to June 2011, the 19.5% increase from Estimate 4 for 2009-10 was driven by a 46.6% leap in planned mining investment and a 40% rise in investment by "Rental, Hiring and Real Estate Services".
Estimate 4 for buildings and structures for 2010-11 is $74,749 million.
This is 37.6% higher than Estimate 4 for 2009-10. The main contributors to this increase were Mining (52.0%) and Other Selected Industries (19.8%).
But the ABS said that the 4th estimate was 2.1% lower than the third estimate, with the main contributor a small, 4.4% fall in mining investment.
That, plus the fall in manufacturing, has led some commentators to suggest that the investment boom may have reached the upper limits and while it will continue at these high levels for several years, we won’t see another dramatic rise.
Estimate 4 for equipment, plant and machinery for 2010-11 is $49,193 million.
The ABS said this "is 0.3% lower than Estimate 4 for 2009-10.
"Mining has increased (29.3%); however, this has been offset by Other Selected Industries (-8.9%).
"By major industry, the main contributors to this decrease were Transport, Postal and Warehousing (-18.1%) and Other Selected Services (-20.1%).
"Estimate 4 for equipment, plant and machinery is 3.3% higher than Estimate 3 for 2010-11. The main contributors to this increase were Mining (5.2%) and Other Selected Industries (3.0%)."
Estimate 4 for Mining for 2010-11 is $55,355 million.
"This is 46.6% higher than the corresponding estimate for 2009-10," the ABS said.
It said that the 4th estimate 4 "is 2.5% lower than Estimate 3 for 2010-11.
"Buildings and structures is 4.4% lower and equipment, plant and machinery is 5.2% higher than the corresponding third e
