(8 November 2024 – Australia) The Australian Treasury’s economic performance analysis reveals robust business investment intent despite multiple headwinds.
Driven by the need to grow capital stock in line with strong growth in labour input, business investment grew by almost seven percent in 2023/24.
Secretary to the Treasury, Steven Kennedy, highlighted “solid growth” in business investment nationwide despite other economic considerations struggling. Drags on growth include weak household consumption sliding to the lowest level (ex-pandemic and GFC), elevated construction costs and declining dwelling investment.
Key growth drivers include machinery and equipment investment, non‑dwelling construction activity and computer software investment. Despite positive trends in the business sector, overall economic growth remains subdued at 1.4 percent for 2023/24 as it continues to limp along in a “per capita recession”.
“The longest ever per capita Australian recession was between 1929 to 1931, otherwise known as the Great Depression. It lasted eight consecutive quarters while the current per capita recession has lasted six quarters as of Q2 2024” stated Political Commentator, Tarric Brooker.
“The reduction we have observed in headline inflation represents a material reduction in cost‑of‑living pressures for households. Underlying inflation is expected to continue to fall in the period ahead” Mr Kennedy commented.
“As is often the case, changes in government policies have affected the prices of goods and services that households face and hence headline inflation. For example, we estimate that energy bill relief reduced inflation by 0.3 percentage points over the year to the September quarter.”