Data shows investment slow
Quarterly figures show Australian business is still reluctant to invest.
In the second quarter, private capital expenditure has fallen 2.5 per cent despite forecast for a 0.6 per cent expansion.
Capital expenditure is up just 0.4 per cent for the year, in the Australian Bureau of Statistics seasonally adjusted series.
Investment is down on construction in all sectors — mining, manufacturing and “other” industries — while spending on plants and machinery has also fallen.
The is some good news though, with an upward revision of spending expectations for the 2018/19 financial year.
The forecast has improved from the first quarter estimate of $88 billion to $102 billion.
Capital Economics analyst Paul Dales says the final number could be closer to $110 billion, but that is still 7 per cent below last year.
“The second quarter Private Capital Expenditure Survey supports our view that GDP may have risen by just 0.5 per cent in the second quarter and that growth in business investment may have already peaked,” Mr Dale said.
“The weakness in the second quarter was widespread.
“The 7.2 per cent plunge in mining capex was the largest in two years and the breakdown by assets shows that buildings capex fell by 3.9 per cent and that equipment/machinery dropped by 0.9 per cent.”