Capex Slows but Activity Holds Near Capacity

• Q4 private capex rose 0.4% qoq following the 6.4% lift in Q3 – a clear loss of momentum but still ahead of expectations for no growth, suggesting activity is stabilising rather than contracting.
• Construction-related investment was unchanged at 2.3% from Q3, supported by continued rollout of large infrastructure and property projects, particularly in utilities and telecommunications.
• Combined with recent partial indicators, the data is consistent with GDP tracking near 0.7% for the quarter, leaving growth at or slightly above the economy’s estimated capacity pace.
• Rates rallied yesterday, with 3yr futures easing to around 4.23% and the 10yr moving toward 4.68%.
• Focus now shifts to January private sector credit data to see whether the RBA’s firmer stance is starting to weigh on borrowing demand.