Business is preparing for a capital strike

Initial capex estimates for 2014-15 signal a decline of 10 per cent or more, as new investment falls well short of filling the mining gap and manufacturing fails to take part in any rebalancing.

The mining investment cliff will arrive in the 2014-2015 financial year; it is also the year that the Australian manufacturing industry unofficially dies. Data on capital expenditure intentions for the next two financial years paints a bleak picture for the Australian economy, with both mining and manufacturing investment set to decline sharply in the 2014-2015 financial year. 

New capital expenditures fell by 5.2 per cent in the December quarter, weaker than market expectations of a more modest decline, to be 5.7 per cent lower over the year. This followed surprisingly strong expenditure in the September quarter.

Graph for Business is preparing for a capital strike


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