Australia's business investment expanded more than expected in the second quarter as investment growth in mining offset declines in the manufacturing and other sectors.
Data released by the Australian Bureau of Statistics on Thursday showed that total new capital expenditure grew 3.4 percent in the June quarter from the prior three months. The expansion follows a revised 7.7 percent growth in the first quarter and exceeds the 3 percent increase forecast by economists.
On a yearly basis, business investment surged 27.4 percent in the second quarter. Third estimates by the agency pitches planned investment for the year ending June 30 rose at A$181.53 billion, which is up 4.7 percent from the second estimate.
Investment in building and structures grew at a slower pace of 4.8 percent sequentially in the second quarter after increasing 13.5 percent in the previous quarter. Meanwhile, investment in plant and machinery recovered in the second quarter, up 1.2 percent, reversing the 0.5 percent drop a quarter ago.
Reserve Bank of Australia Governor Glenn Stevens told lawmakers last week that the ongoing mining boom will likely see its peak within the next year or two. He said policy makers are prepared to respond if the economy slows.
The bank eased monetary policy in May and June, lowering the cash rate by a total of 75 basis points. This was done in addition to two adjustments made last year.
In a separate communique, the statistical office said dwelling approvals plunged 17.3 percent in July from June, when it dipped 1 percent. From a year ago, it was down by 10.6 percent.
by RTT Staff Writer
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