Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Mining boosts Australia business investment to 8-year high, outlook upbeat

Published Nov 29, 2023 08:27PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The edge of Glencore's Mount Owen coal mine and adjacent rehabilitated land are pictured in Ravensworth, Australia, June 21, 2022. Picture taken with a drone. REUTERS/Loren Elliott/File Photo

By Wayne Cole

SYDNEY (Reuters) - Australian business investment rose to an eight-year high in the September quarter thanks to a rebound in mining, while plans for future spending were upgraded in a much-needed boost for economic growth.

Data from the Australian Bureau of Statistics on Thursday showed private capital spending rose a real 0.6% in the third quarter from the previous quarter, led by a 5.6% increase in the mining sector.

Total spending of A$39.9 billion ($26.43 billion) was the highest since late 2015 and almost 11% higher than a year earlier, encouraged in part by tax breaks on new equipment.

Firms also lifted spending plans for the fiscal year to June 2024 to A$171.2 billion, up 8.5% on the previous quarter and just pipping analyst forecasts for $169 billion.

"The information media and telecommunications industry had a particularly large rise based on planned investment in new data centres," noted Robert Ewing, ABS head of business statistics.

"The mining industry also raised its spending on iron-ore projects and battery-related mineral developments."

That follows data showing surprisingly strong construction work for the third quarter, which also contained big upward revisions that left spending up more than 12% for the year.

Much of those gains came from a government splurge on infrastructure, which has become so large the IMF recently recommended some projects should be delayed to prevent costs blowing out and adding to inflation.

Demand running ahead of supply has become a real challenge with the Reserve Bank of Australia (RBA) citing it as a major reason inflation is proving more stubborn than hoped.

The central bank responded by lifting interest rates to a 12-year high of 4.35% this month and another move will likely be on the agenda at its last policy meeting of the year on Dec. 5.

Analysts doubt it will hike again so quickly, in part because October inflation figures surprised on the low side.

Markets have also pared back the risk of a rise next year, though they also imply little chance of a rate cut either.

One sticking point for the RBA has been a surprisingly rapid revival in home prices which has boosted household wealth and stoked spending power even as the central bank is trying to put a lid on consumption.

Again, demand is far outstripping supply as record inward migration meets a dearth of suitable accommodation.

Figures on home building out on Thursday showed a welcome 7.5% bounce in approvals for new dwellings, but that was still down more than 6% on a year earlier and well short of the pace needed to meet population growth.

($1 = 1.5110 Australian dollars)

Mining boosts Australia business investment to 8-year high, outlook upbeat
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email