(8 November 2024 â Australia) The Australian Treasuryâs 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 âsolid growthâ 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, nonâdwelling 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 âper capita recessionâ.
âThe 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 2024â stated Political Commentator, Tarric Brooker.
âThe reduction we have observed in headline inflation represents a material reduction in costâofâliving pressures for households. Underlying inflation is expected to continue to fall in the period aheadâ Mr Kennedy commented.
âAs 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.â