Business investment is expected to have taken a hit during the recent COVID-19 lockdowns, but economists are hopeful that firms have upgraded their future spending plans.
The Australian Bureau of Statistics releases private new capital expenditure for the September quarter on Thursday, which will feed into next week’s national accounts.
Economists’ forecasts point to a 2.5 per cent decline for the quarter, with the NSW, Victoria and ACT lockdowns disrupting the positive momentum recorded over the three previous quarters.
However, expectations range from a five per cent decline to a one per cent increase.
The report will also contain investment intentions for the whole 2021/22 financial year, with businesses having been surveyed as lockdowns were easing.
ANZ senior economist Catherine Birch expects that despite the lockdowns firms will have upgraded their plans to $130 billion from a previous estimate of $128 billion.
“An upgrade to $135 billion or above would mean firms have shrugged off the short-term impact of the lockdowns, while a reduction to below $128 billion would raise concerns that capex won’t return to the strong pre-Delta trajectory,” she said.
The September quarter national accounts due on December 1 are expected to show a hefty economic contraction as a result of having half the population in lockdown.
Some economists believe the contraction could be close to four per cent.
However, construction figures released on Wednesday suggested the overall damage may not have been a bad as first thought, with completed work in the quarter easing just 0.3 per cent when a three per cent decline was expected.
Even so, earlier retail spending data fell 4.4 per cent in the September quarter, the largest quarterly decline on record.
Quarterly data for company profits, business inventories, international trade and government spending will be issued early next week.
The ABS will also release more up to date data for payroll jobs on Thursday, covering the fortnight to October 30, and capturing the early stages of the easing COVID-19 restrictions.
