Capital expenditure (capex) in mining basically peaked in mid-2012, stabilized over the following six months and then plunged steeply in the March quarter, wiping almost $1.5 billion off Australia’s quarterly output.
Mining capex dropped 6.2% ($1.47 billion) in the March quarter, after seasonal adjustment. The Bureau revised down its estimate of capex in the previous six months by $872 million or 1.8%.
All these means the ongoing debate over whether the resources boom would peak in 2013, 2014 or 2015 is officially over. It already ended last year.
Non-resource investment also slid in the March quarter, sinking to its lowest level as a share of the country’s GDP for almost 60 years.
However, economists say there is still strength in the Australian economy with business spending expectations remaining upbeat.
In fact, while private capital expenditure for the March quarter was weaker than expected, the figures released today show stronger spending expectations for the 2013-14 financial year, including a slight surge in mining investment projections.
ABS forecasts a 16% lift in spending in the June quarter, followed by a further 4% climb to $102 billion in 2013-14.
Barclays chief economist Kieran Davies told The Age the latest figures suggested the peak in mining investment was imminent, but that the rest of the economy was still very cautious in its growth.
“At this stage, it’s really only the service industries that are looking to lift their expenditure next year. Manufacturers are still planning to slash their investment,” Davies was quoted as saying.
Mining investment has been one of the key drivers of the Australian economy in recent years, and makes up about 8% of the economy.