Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Australian business investment to remain strong

Full release with charts

Australian business investment to remain strong into 2009

Australian business investment rebounded in the December quarter, rising 5.1%q/q (JPMorgan 6.0%, consensus 3.1%), after dropping a revised 6.2% in 3Q (previously -6.5%).

The fourth quarter business survey showed a slight upgrade to firms’ expectations for spending in the year ending June 2008. In the previous survey, managers expected to raise business investment by 14.0%; now, managers expect a 14.7% rise, driven primarily by the building asset class (+23.1%). Investment recovered strongly in 4Q across each of the main industry groups, after slumping in the September quarter amid rapidly growing global growth concerns. The largest rise was recorded in the manufacturing sector, where spending jumped 8.7%, marking the second straight rise after seven quarters of negative growth. Investment in the mining sector and ‘other selected industries’ both rebounded from falls in the previous quarter to rise 5.6% and 3.8%, respectively, in 4Q.

More importantly, the forward looking component of this survey showed that the first estimate of firms spending intentions for the 12 months ending June 2009 rose 23.6% (from the corresponding estimate a year earlier) to A$78.55 billion. The upgrade may reflect firms’ increased confidence in the outlook for the global economy in the latter half of 2008 and going into 2009.

Indeed, Australia’s private investment outlook remains rosy. Firms expect to raise their investment spending at a double-digit pace again in 2008-09, maintaining the robust momentum of the current investment cycle. Solid business investment should continue to help alleviate the capacity constraints and infrastructure bottlenecks hampering the nation’s export performance and boosting productive capacity should, eventually, help curb inflation pressure.

The details:

New capital expenditure increased 5.1%q/q in 4Q. Spending on buildings and structures rose 5.1%, while spending on equipment and machinery was up 3.8%.

The fifth estimate for 2007-08 was 14.7% higher than the fifth estimate for 2006-07 and 0.7% higher than the fourth estimate of 2007-08.

The first estimate for 2008-09 rose 23.6% from the first estimate of 2007-08.

Full release with charts

© Scoop Media

Business Headlines | Sci-Tech Headlines


Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>


Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>