Australia's capital expenditure, or capex, in the September quarter demonstrated an annual increase, although a slowdown is anticipated as expenditures are set to rise in the forthcoming financial year. The latest statistics revealed that capex rose by 1.1% during the given period, up from 1% in comparison to the same quarter last year, surpassing the median market forecast of a 1% increase and Westpac's estimate of a 0.9% growth. Robert Ewing, the head of business statistics at the Australian Bureau of Statistics, mentioned that business investment in non-mining sectors surged by 2.3%.
This growth was somewhat tempered by a 1.9% decline in mining-related capex. Notably, expenditures on buildings and structures, along with investments in new equipment and machinery, each saw a growth of 1.1%, while non-mining industries witnessed an impressive jump of 3.5%. Ewing explained, "The rise in buildings and structures was driven by increased spending on large-scale upgrades in the manufacturing sector and data center projects within the information, media, and telecommunications fields." He added that this rise was partially mitigated by a 2.5% decline in spending on mining industry-related buildings and structures, following a rise last quarter. Key industries contributing to the growth of non-mining investment included finance and insurance, healthcare and social assistance, and manufacturing, with equipment and machinery capex experiencing a 1.4% increase. Moreover, businesses have elevated their capex projections by 5.1% for the 2024-2025 period.
Major sectors driving this improved outlook include construction, electricity, gas, water and waste services, and transport, postal, and warehousing. Westpac has estimated that business investments for the initial three months of the financial year could reach AU$178.2 billion, reflecting a 4.3% increase compared to the previous year. The lender noted that the pace of capex growth continues to moderate, with forecasts for the 2024-2025 financial year likely falling to its lowest level since the 2018-2019 cycle.
Westpac commented, "As consumer demand strengthens, we expect to see a more widespread uptick in capex; this trend will likely become more pronounced in 2026-2027 and beyond.".