Positive signs as miners opt to dig deep for machinery
AUSTRALIAN business investment fell short of 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, official figures show.
Business investment, measured by capital expenditure, rose 0.4 per cent in the March quarter to $29.81 billion, according to the Australian Bureau of Statistics.
That undershot market forecasts for a 0.7 per cent gain, but 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, according to economists.
The miss on the headline number did little to move the Australian dollar, which was buying US75.77c late yesterday. Official quarterly figures on growth in the economy, measured by gross domestic product, are due next week and likely to clock in between 0.5 per cent and 0.8 per cent, analysts believe.
Helping the economy is the diminishing drag from the mining investment wind-down and an upswing in non-mining construction to meet the needs of a rapidly growing population.
The latest official estimates for business investment for the financial year were in fact upgraded further to $117.5 billion, from $114.6 billion, topping forecasts from most analysts. Spending plans for sectors including utilities, construction and retail trade, were all running at record highs.