Register now for FREE unlimited access to reuters.com Spending plans for the year to end June 2022 were upgraded to A$138.6 billion, above most analysts’ estimates and a sign business confidence had weathered the disruptions well. Register
SYDNEY, Nov 25 (Reuters) – Australian business investment slipped in the third quarter as pandemic lockdowns shut many firms, though future spending plans proved surprisingly resilient and a rapid recovery is expected now that most restrictions have been lifted. Capex -2.2% q/q in Q3 vs forecasts of -2.0%Spending plans for 2021/22 beat expectations at A$138.6 blnQ3 GDP to shrink, but recovery underway as economy reopens
Figures from the Australian Bureau of Statistics out on Thursday showed capital expenditure fell a real 2.2% in the third quarter to A$32.7 billion ($23.57 billion), in line with market forecasts of a 2.0% drop. Register
Data on gross domestic product (GDP) due next week is expected to show a sharp contraction given stay-at-home rules in Sydney and Melbourne hammered consumption during the quarter. Yet with 86% of the adult population fully vaccinated, most restrictions are gone and spending has quickly ramped up as retailers count on a bumper Black Friday of sales this week. For the third quarter, most of the pullback in investment came in plant and machinery with the retail and education sectors particularly hard hit by the lockdowns.
“Construction, wholesale trade and transport, postal and warehousing led the way, reflecting the need to expand capacity to properly service the substantial shift to online retailing.” “It suggests that spending this financial year will be over 10% higher than fiscal 2021, comfortably outstripping the levels seen in the three years prior to the pandemic,” said Sarah Hunter, chief economist for BIS Oxford Economics.
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