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Australia Capital Expenditure Rises Less Than Expected

australia aug19 24feb22 lt

Australia's private capital expenditure grew less than expected in the fourth quarter but firms plan to raise their investment in 2022-23, data released by the Australian Bureau of Statistics showed Thursday.

Total capital expenditure grew 1.1 percent in the fourth quarter, but slower than the economists' forecast of 2.6 percent.

Investment in buildings and structures was up 2.2 percent, while equipment, plant and machinery investment fell 0.1 percent.

On a yearly basis, total capex expanded 9.8 percent in the fourth quarter.

According to the fifth estimate for 2021-22, total capital expenditure was A$140.8 billion, up 1.6 percent from the fourth estimate.

At the same time, capex for 2022-23 was 10.8 percent higher than the first estimate for 2021-22.

The key point is that while firms may not have grown investment in Q4, they plan to lift capital spending in the years ahead, said Ben Udy, an economist at Capital Economics.

The business mood was generally upbeat throughout 2021, albeit with brief setbacks when virus case numbers spiked, Andrew Hanlan, a senior economist at Westpac said. Firms have been increasing investment spending, particularly on equipment.

They are responding to underlying strength in demand, limited spare capacity, mainly in the goods sectors, and generous government tax incentives, the economist added.

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