Non-mining capex intentions improve modestly

There are mixed messages for the Australian economy, with new risks emerging over the past month for Australia’s growth outlook. New downside forces are minor but they do temper the strong start to the year.

Australian consumer confidence fell again, albeit at a slower pace than in the lead up to the Commonwealth Budget.

Whilst, non-mining firms capex plans for 2014-15 were upgraded modestly suggesting a gradual upswing at a time when resources investment will fall sharply

Also encouraging were clearer signs that the sharp increase in approvals to build dwellings last year is now resulting in stronger construction activity, with private residential building rising around 7 per cent quarter in the first quarter.

As expected, much of the strength was in NSW. In the first quarter private non-residential building was also strong, rising 3.7 per cent quarter on quarter, as foreshadow by earlier increases in approvals. Private sector credit growth in April was slightly stronger than market expectations, led by a 0.6 per cent month on month rise in housing credit.