Global Deflation Alert: Australia’s Unprecedented Collapse of CapEx in One chart

You’ve probably heard of the ‘capex cliff’, the term for the collapse in capital expenditure plans by Australian businesses that is an inevitable feature of the economy following the once-in-a-lifetime mining investment boom driven mainly by the surge in Chinese demand over the past two decades.
But with Australia’s manufacturing industry having been hollowed out too over the past decade, the capital investment pipeline for both mining and manufacturing are gone. So the fall-off, when measured in terms of a percentage of GDP, is nothing short of spectacular in historical context, as shown in this chart from Macquarie:

This post was published at David Stockmans Contra Corner By PAUL COLGAN, Business Insider ‘ August 22, 2016.