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Australia Q1 business investment disappoints but firms boost spending plans
[SYDNEY] Australian business investment missed expectations last quarter as manufacturers cut back on spending, yet other sectors including miners splashed out more on plants and machinery in a positive sign for economic growth.
Investment rose 0.4 per cent in the March quarter to A$29.81 billion (S$30.2 billion), data from the Australian Bureau of Statistics (ABS) showed on Thursday.
That undershot forecasts for a 0.7 per cent gain, though largely because investment in the previous quarter was revised higher to show an increase of 0.2 per cent from a fall of 0.2 per cent.
Importantly, spending on equipment, plant and machinery climbed 2.5 per cent and should have added moderately to economic growth in the first quarter.
The miss on the headline number did little to move the Australian dollar which was last down 0.2 per cent at $0.7557.
Figures due next week are likely to show Australia's A$1.8 trillion gross domestic product (GDP) expanded by anywhere from 0.5 per cent to 0.8 per cent in the quarter.
Helping the economy is the dimishing drag from the mining investment wind-down and an upswing in non-mining construction to meet the needs of a rapidly growing population.
Indeed, the latest estimates for business investment in the year to June 2018 were upgraded further to A$117.5 billion, from a previous A$114.6 billion, topping most analysts forecasts of A$115.1 billion.
Spending plans for sectors including utilities, construction and retail trade, were all running at record highs.
From the June quarter, ABS data will include experimental estimates of capital expenditure for the education and healthcare industries - among the fastest growing sectors in Australia.