Next week is a busy one for fresh news on the economy. The private new capital expenditure data will be a particular highlight as the slide in Capex over the past four years gets closer to a trough. Or so the RBA, Treasury and all economists hope.
The unrelenting decline in business investment in recent years has been driven by falls in the mining sector – projects have been completed and are now well and truly in the production and export phase. Unfortunately, the much hoped for upturn in non-mining investment to at least partly offset the mining decline has failed to materialise despite record low interest rates. In the budget earlier this month, Treasury was forecasting business investment to bottom out in 2017-18 and then to rise 3 per cent in 2018-19. These look to be solid forecasts but for them to occur, we need to see some better (less bad) news from next week’s data.
