Australian business investment missed estimates in the three months through September, even as companies increased expected outlays for the current fiscal year.
Total capital expenditure rose 0.6% last quarter from the prior three months, versus economists’ estimate of a 1% gain, Australian Bureau of Statistics data showed Thursday. Firms intend to invest A$171.2 billion ($113.4 billion) in the 12 months through June 2024, compared with a forecast A$167 billion.
“The mining industry was the main driver behind the growth in total new capital expenditure, increasing by 5.6% in the quarter,” said Robert Ewing, ABS head of business statistics. “This was offset by a fall in non-mining industries, down 1.3% after large rises in the previous four quarters.”
Western Australia had the biggest increase among the states and territories, climbing 7.5% in the third quarter, the ABS said.
Australia’s central bank resumed raising interest rates this month after a four-meeting hiatus as the economy remains stronger than anticipated and inflation is proving sticky. It said in a quarterly update of economic forecasts released about three weeks ago that business investment is expected to continue to expand, underpinned by strong population growth and high capacity utilization.
Higher investment should, over time, help to lift labor productivity, a key element in containing price pressures in the economy, the central bank said Nov. 10.
Thursday’s report showed spending on equipment, plant and machinery rose 0.5% and buildings and structures investment advanced by 0.7%.
Some elements in the capex report factor into third-quarter GDP that’s due to be released on Wednesday.
--With assistance from Tomoko Sato.
