Australian business investment rose moderately last quarter as demand recovered from pandemic lockdowns and miners profited from high commodity prices, while future expenditure intentions were marked higher once again.
The Australian Bureau of Statistics said on Thursday that capital spending increased by a real 1.1 percent to A$33.3 billion ($24.03 billion) in the December quarter, missing market expectations of a 2.6 percent growth.
Spending intentions for the year ending June 30, 2022 were raised to A$144.8 billion, above experts’ expectations and indicating that corporate confidence had weathered the storms well.
The preliminary projection for 2022/23 came in at A$116.7 billion, up 11% from the initial estimate for 2021/22.
The failure on fourth-quarter expenditure will slash some GDP predictions, which are expected next week.
Despite this, growth appears to have rebounded significantly, as the lifting of coronavirus lockdowns unleashed a wave of previously untapped spending by households, which generally account for roughly 51% of GDP.
According to a new ABS data series issued this week, nominal household spending increased by a massive 22 percent in the fourth quarter, compared to the disastrous third quarter.
Even after accounting for a 1.3 percent increase in consumer prices, real household expenditure is likely to have increased by approximately 10%, dwarfing any drag from other sectors.
Analysts predict GDP growth of roughly 2.5 percent in the fourth quarter, more than making up for the 1.9 percent decline in the third quarter.
According to the most recent data from ANZ, spending on its cards by families and companies quickly recovered in February. Dining and takeaway spending was up 9% year over year last week, non-food retailing was up 10%, and travel was up 38%.